by Patrick Fearon-Hernandez, CFA | PDF
Because of Japan’s enormous role in the world, investors need to pay attention whenever the country undergoes a change of leadership as it did last week. After all, Japan currently accounts for some 7% of global stock market capitalization and 6% of the world’s gross domestic product. Not bad for a country whose 126 million people make up just 1.7% of the world’s population! Japan is also a key U.S. ally in the military and diplomatic spheres. It hosts huge U.S. military bases, allowing the U.S. to mount a robust “forward defense” in the Western Pacific, and it’s a vital partner in countering aggression from nations like China and North Korea. With its stable, vibrant democracy and dynamic consumer culture, Japan is a natural partner for the U.S. in East Asia.
But who is Japan’s new prime minister? In this report, we’ll sketch out the biography of Yoshihide Suga and examine how he’s likely to govern in the years ahead. We’ll focus especially on his probable policies in the areas of diplomacy, defense, economics, and finance, and we’ll discuss how effective he might be as a leader. As always, we’ll wrap up with a discussion of what the new prime minister might mean for investors.