Business, Economics and Jobs

Japan's new PM unveils cabinet and names economy as top priority


Japan's new Prime Minister Shinzo Abe (C), accompanied by Finance Minister Taro Aso (3L) and Justice Minister Sadakazu Tanigaki (2nd R), waits for his vehicle after a photo session with his cabinet members as they were inaugurated before Emperor Akihito at the Imperial Palace in Tokyo on December 26, 2012. Abe was elected Japan's prime minister by the lower house of parliament after he swept to power on a hawkish platform of getting tough on diplomatic issues while fixing the economy.



Japan's newly elected Prime Minister Shinzo Abe unveiled his cabinet selections on Wednesday and vowed he would set in motion "bold" economic policies that would tackle deflation and strengthen the nation's economy. 

Abe, 58, was elected after his conservative, pro-business Liberal Democratic Party swept to victory in parliamentary elections on Dec. 16.

The BBC reported that Abe, who previously served as prime minister in 2006-07, will focus his agenda on growth and strengthening ties with the United States. 

"With the strength of my entire cabinet, I will implement bold monetary policy, flexible fiscal policy and a growth strategy that encourages private investment, and with these three policy pillars, achieve results," he said. 

Abe's cabinet selection also shows his commitment to economic revitalization. He selected another former prime minister, Taro Aso, as finance minister. 

Aso, now 72, served as prime minister from 2008-2009, launching a massive economic stimulus packages to combat the global financial crisis but all of the recent leaders struggled with gaffes and missteps. 

Japan has seen a high turnover in prime ministers, with seven cycling through Parliament in only six years. 

Akira Amari, 63, was appointed to the new cabinet position of economic revitalization minister, according to the Financial Times. Amari drafted Abe’s economic strategy, nicknamed "Abenomics", which calls on the Bank of Japan to set an inflation target of 2 percent, provide "unlimited" easing and support the government’s fiscal stimulus measures, reported FT. 

The Japanese economy took a huge hit after it entered a trade dispute with China over a group of uninhabited islands in the East China Sea. Both countries claimed ownership of the islands and Japan angered Asia's biggest economy when it nationalized the islands in September, CNN reported.

Chinese consumers boycotted Japanese goods and the number of Japanese products exported to the country dropped by more than 14 percent. 

Investors are hopeful that Abe will be good for the country's equity markets. 

"Investors are pricing in ... much greater monetary easing," Ben Collett, head of Japanese equities at Louis Capital Markets in Hong Kong told CNN.