The Japanese election on 16 December is attracting intense interest in the global financial markets. In part, this is because the LDP’s election campaign, led by Mr Shinzo Abe, is based on forcing an entirely new monetary strategy on the Bank of Japan, with obvious consequences for the yen and the equity market.
On top of that, the Japanese election is the first in a major democracy where the role and mandate of the central bank has taken centre stage in a national political campaign. Is this the shape of things to come in other democracies facing low growth, subdued inflation and rising government debt ratios? Politicians in many other developed economies will be watching the Japanese experiment with rapt attention. Read more