Japan's new prime minister Yasuo Fukuda--Good for Asia
September 24, 2007

Yasuo Fukuda was chosen  as prime minister of Japan on to replace Shinzo Abe, who resigned suddenly after less than a year in office. Fukuda will move away from the nationalist policies of Abe and his predecessor, the popular Junichiro Koizumi. Instead, Fukuda will rebuild relationships with China by not visiting the Yasukuni War Shrine, regarded as a symbol of Japanese militarism in much of Asia.

Fukuda will continue many of the economic policies initiated by Koizumi, which Abe let lag. In addition, he will increase government spending in the rural areas, which Abe also cut back and which probably cost him his job. (Source: IHT, Yasuo Fukuda, a moderate, is chosen to lead Japan, September23, 2007)

What Yasuo Fukuda as Prime Minster Means:
Fukuda is widely regarded as a place-holder leader until the country recovers from Abe's mismanagement. There could be some serious political jostling until things sort themselves out. Fukuda's position as a moderate means that he is a predictable leader during these turbulent economic times.

Action Steps:
Overall, Fukuda should be good for the Southeast Asian economies. If you have Japan-related sector funds, keep them.

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