Snap elections in Japan pressure yen

Japanese Prime Minister Shinzo Abe announced on Tuesday the dissolution of the lower house and called snap elections for December, two years ahead of schedule.

At a news briefing, he said he would dissolve parliament later this week and was also delaying a planned but unpopular increase in sales tax.

Mr Abe was elected two years ago with an ambitious plan to revive the economy, but has struggled to do so.

His popularity has fallen but he is expected to win the election, which will take place in mid-December.

“I will dissolve the lower house on 21 [November],” Mr Abe said.

Mr Abe’s party, the Liberal Democrats, already have a majority in the lower house, but analysts said Mr Abe hoped to consolidate power over an opposition party which is in disarray.

He also wants public support to continue to press ahead with “Abenomics”, his ambitious plan to kick-start Japan’s stagnant economic growth using heavy government spending and economic reforms.

“I need to hear the voice of the people,” Mr Abe said. “I will step down if we fail to keep our majority because that would mean our Abenomics is rejected.”

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