In the recent general election held in Japan, the Liberal Democratic Party of Japan (LDP) won 294 seats in a landslide victory while the ruling DPJ managed to win only 57 seats. As the President of LDP, Shinzo Abe is expected to become the next Prime Minister on December 26. The LDP and New Komeito, the two former coalition partners in the pre-2009 LDP-led governments, are expected to form another coalition government this time as well. Although the LDP and Komeito do not have a majority in the Upper House of the Diet - the House of Councilors - the two, with a combined 325 seats, do have a majority of seats in the Lower House - the House of Representatives. Their majority in the Lower House could be extremely handy as they can pass bills by voting them through a second time if they are voted down in the Upper House.
The new administration seems to have inherited a host of challenges (both in the domestic and international fronts) from the preceding DPJ-led government. On the domestic front, the new government has to primarily deal with deflation and hyper-appreciation of the yen. In order to boost the economy, the Abe administration plans to quickly compile a supplementary budget for fiscal 2013 worth several trillion yen and submit it to an ordinary diet session set to convene in late January 2013. As pledged during its election campaign, the LDP might also introduce bold monetary easing measures, including setting an annual inflation target and forming a policy accord with the Bank of Japan.
Constitution revision is likely to emerge as a subject of debate during Abe's tenure. The LDP is reportedly considering to discuss with its coalition partner New Komeito the easing of requirements for amending the constitution as stipulated in Article 96. However, persuading the New Komeito on this issue might not be easy as it is quite cautious about the LDP's possible future intention to revise Article 9 (the no war clause).
Nuclear energy will continue to dominate the domestic debates within Japan. The LDP has so far refrained from offering a clear-cut stance on the issue possibly due to strong popular sentiments about it. The LDP leadership has been very critical of the zero-nuclear policy proposed by the previous DPJ government. Since the Fukushima nuclear accident (March 2011), the operation of most nuclear reactors in Japan has remained suspended, which, according to the advocates of nuclear energy, has led to the acceleration of the industrial hollowing out process as well as the emergence of an unemployment problem. Therefore, under the LDP leadership, nuclear reactors in Japan might once again be activated (though only after their safety has been scientifically proved) to deal with the energy deficit. However, the LDP's stance on nuclear energy continues to face criticism from various quarters. Right now, the party's energy policy seems to lack a sense of urgency, as it talks about mapping out the country's energy source structure over the next 10 years.
Rebuilding Japan's foreign policy will be another challenge for the Abe Administration, especially in view of the rising tension between Japan and its neighbouring states - China and South Korea - over territorial disputes. As far as the Japan-US security alliance is concerned, it is expected to grow further. During the LDP's more than five decades long rule before 2009, the party had maintained strong relations with the United States. The party is not likely to change its course now on this front. In fact, Abe's expected visit to the United States in January 2013 clearly underlines the LDP's continued faith in strong Japan-US bilateral ties. In the meantime, the party's call for creating a "Basic Law on state security" to enable the nation to exercise its right to collective self defence is also expected to bolster Japan's alliance with the United States. However, it remains to be seen how Abe is going to deal with issues such as the tension over the Futenma relocation, rising anti-US sentiments over growing crimes involving US servicemen in Okinawa, etc.