Japanese Prime Minister Shinzo Abe meets with President-elect Trump
In the election aftermath we’re seeing the world reacting to President-elect Trump, and that certainly includes our neighbors in Asia. Let’s try and start by focusing in on Japan for now. The implications of a change in American leadership should be clear, given the interconnected nature of Japanese markets and American ones. In this modern age our economies are forged together, and likewise so are our alliances. Japan, an enemy in World War 2, became a staunch ally in the capitalist stand against Soviet Russia during the Cold War. Indeed, they continue to stand with us to the present day. In addition to our interconnected & interdependent markets, Japan still relies on the US for much of their defense, protection, and militaristic needs. To that end, some of Trump’s promises during the nomination & election process have many worried Trump will be reevaluating the costs & strains American military support put on the American budget with regards to Japan and similar countries (South Korea coming readily to mind). Additionally, there’s the question of where Trump’s experienced hand in business sees our foreign trade agreements standing.
Well – let’s start with the obvious. President-elect Trump’s remarks regarding trade and defense policies have left many Japanese citizens concerned what impacts his presidency will have on Japan.1 In part because of this and in part because of President-elect Trump’s lack of experience in politics or government – Prime Minister Shinzo Abe’s meeting with Trump this week felt necessary to assess the future relations between the two leaders and their respective countries. Prime Minister Shinzo Abe’s previous interactions with the National Diet (Japan’s legislature portion of government) confirmed the tone and content of Abe’s meeting as following a very predictable route: matters of trade, the economy, and national security.1
Although little has been released on the actual contents of the conversation, Prime Minster Shinzo Abe (speaking via a translator) said: “I am convinced that Mr. Trump is a leader in whom I can have great confidence.”2 The general tone appeared positive and upbeat, and Shinzo Abe seemed to feel well-received and heard. This stands in stark contrast to the more brash-natured Trump embodied prior to assuming the title of President-elect. True, Trump’s brashness may well have been more reserved for Twitter and rabble-rousing in rallies, but still – it demonstrates some moderate positivity from the Trump camp. While Japan in general may still have concerns about the implications of a Trump presidency, political and governmental leadership in Tokyo appear confident in the long term outcomes.
Continuing with the economic theme, the close of the year shows the value of the yen on the decline with stock prices rising3. In essence, we’re seeing a decline in the value of the Japanese currency while the stock market continues to climb. Much of this is being attributed to a continuing response to the surprising outcome of the US elections just last week. Specifically, the two trends primarily being credited are expectations of stronger US economic policies and growing gaps in interest rates between Japan and the United States3.
While protests and unrest may be common in the US presently, the initial outlook on the US elections out of Japan appears wary but optimistic. True - there remain concerns about what will happen regarding defense policies & national security. The biggest questions left unanswered seem to be if Japan will be forced to pay more for US protections, or if Japan will be given more freedom (and the attached, growing expenses) when it comes to defending themselves. Still – Japanese political leadership appear confident in both their expectations and plans moving forward, and the markets appear to reflect a similar mind set.
1 - http://www.asahi.com/ajw/articles/AJ201611180041.html
2 - http://www.bbc.com/news/world-us-canada-38021814
3 - http://www.asahi.com/ajw/articles/AJ201611180056.html