Japanese Prime Minister Shinzo Abe has said he will dissolve parliament's lower house on Thursday for a snap election. As Sonia Legg reports, he's seeking a mandate to stick to his tough stance towards a volatile North Korea and rebalance the social security system.
He's been in power for five years and is seen as a strong leader in Japan. The economy is also improving. The latest government survey suggests consumer spending and exports are picking up. A good time then to take a risk and call a snap election (SOUNDBITE) (Japanese) JAPANESE PRIME MINISTER, SHINZO ABE, SAYING: "In a national crisis with a shrinking and ageing population, as well as a tense situation with North Korea, I'd like to stand on the frontline and exercise strong leadership." Abe wants to be certain he has support for a tough stance against North Korea. He also wants a new mandate to shift some revenues from a planned future tax hike to social spending. He's asked his cabinet to compile an $18 billion package to focus on child care, education and encouraging corporate investment. It means he won't meet the government's target of balancing Japan's budget by 2020. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "Shifting domestic politics is always an issue for markets but I do believe there is an overall commitment to ensuring that Japanese companies have become more shareholder friendly and that ultimately will be a key driver for both earnings per share and also for corporate valuations." But some have questioned the central bank's monetary policy, which once again saw no change last week. Consumer inflation also remains well below the BoJ's 2 percent target. (SOUNDBITE) (English) LCG SENIOR ANALYST, JASPER LAWLER, SAYING: "My worry is that down the road as yields start to rise, particularly longer term yields they won't be able to maintain their current zero percent target on their 10-year Japanese bonds." But Abe's ruling coalition is expected to maintain its majority when voters go to the polls in four weeks. Helped in no small way by an opposition is disarray.