Economy at center of Abe's Cabinet reshuffle

Japan's Prime Minister Shinzo Abe on Wednesday reshuffled his Cabinet for the first time since retaking the nation's helm in December 2012 and ushered in no less than twelve new faces, including five female ministers in his new-look 18-member lineup.

Abe's picks fell largely in line with political pundits' expectations and increasing the number of female ministers to five, a joint-record in Japanese politics, was widely seen as a concerted effort to kickstart his ambitious "womenomics" initiative to expand the number of women in Japan holding senior positions in the workforce to 30 percent by 2020.

"On the one hand it may seem like the reshuffle was rather extensive, but in actuality all of the appointments come as no surprise and seem largely based on the nation's economic needs, Abe's own desire to hang on to the leadership and a couple of shifts based on security and foreign policy," political commentator Philip McNeil told Xinhua.

"In addition, Abe clearly wants to ensure a better showing by his ruling Liberal Democratic Party (LDP) at a local level, with an eye on governors' elections this year and national local elections next spring," McNeil said.

In terms of economics, McNeil added that retaining the services of Taro Aso as finance minister and Akira Amari, a close ally of Abe and a key architect of his aggressive "Abenomics" brand of economic policies, as economic and fiscal policy minister, was aimed at his protracted push to pull the nation out of the doldrums of economic malaise and deflation, by likely raising the consumption tax again next year, despite the fallout from April's 3 percent hike, and continuing to lean on the central bank via Aso, to do the finance ministry's bidding.

The promotion of LDP Deputy Policy Chief, Yasuhisa Shiozaki, to the position of minister of health, labour and welfare, was another move by Abe to shift gears economically-speaking, pundits said,

Shiozaki, himself a former chief cabinet secretary, is in favor of reforming Japan's Government Pension Investment Fund (GPIF) by shifting more of the bond-heavy fund's assets into stocks.

The GPIF already plans to increase its holdings of domestic stock to more than 20 percent, from its current 12 percent, ahead of median analysts' expectations for spending to increase the fund 's holding to exactly 20 percent, and, Shiozaki's expected reforms will likely achieve far higher returns, and the appointment was cheered by the market here Wednesday.

"Shiozaki's appointment sends a big message to the market. The yen has fallen on bets GPIF will boost the weighting for overseas assets, and investors increasingly expect the fund to raise its allocation to Japanese stocks," Yusuke Kuwayama, a portfolio manager at Tokio Marine & Nichido Fire Insurance Co., was quoted as saying.

Another of Abe's notable allies was also kept in place in the form of Chief Cabinet Secretary Yoshihide Suga, who Abe values as a stalwart supporter and diehard LDP-man, who has enjoyed a loyal intraparty following since he first served in Abe's former Cabinet as Minister of Internal Affairs and Communications, until 2007.

But outgoing LDP Secretary General Shigeru Ishiba was assigned to a newly-created post aimed at revitalizing regional economies and replaced by former Justice Minister, Sadakazu Tanigaki, thus eliminating Ishiba's potential leadership threat by relegating him from the party's No. 2 position.

Tanigaki, who has previously held positions as LDP president, policy chief, finance minister and infrastructure minister, is known to be a party arbitrator and will be charged with ensuring a united intraparty front ahead of regional elections and, unrelated, is also a proponent of Abe's two-tiered consumption tax hike plan.

"The LDP took a pummeling in the Shiga prefectural gubernatorial election in July and it was no coincidence that the ruling party's loss followed Abe's dramatic and highly- controversial reinterpretation of the war-renouncing, pacifist Constitution, to augment the power and scope of the military," Kaoru Imori, a renowned local pundit on Asian affairs, told Xinhua.

"The public made its sentiments very clear at local level and Tanigaki's appointment is a public relations move to avoid future failures at both local and national levels," said Imori.

"As for Ishiba, he refused Abe's initial offer to work on national security legislation, citing differences in opinion that could be exploited by opposition parties, but finally took the newly-created position to stay in the Cabinet and represent the party, and, in doing so, effectively agreed to being demoted," Imori added.

Of particular significance to the future of Japan's diplomatic ties with some of its closest neighbors, at a time when relations are frosty owing to disputes over territory and differing perceptions of history, Tanigaki, known for his relatively moderate views within an increasingly right-leaning LDP, is an advocate for improving ties with China.

In addition, Toshihiro Nikai, head of the House of Representatives Budget Committee and former transport minister, was previously tapped to chair the LDP decision-making General Council, which is considered a senior party post, and the veteran lawmaker is also known to have close ties with China.

Nikai told a news conference earlier Wednesday that he intends to use his connections in Beijing for the betterment of political relations between Japan and China, as well as rebuilding bridges with other neighboring countries that Japan has wronged or spurned.

"On the one hand there are now party elders who have the potential to use their extensive experience and positive associations with China to help forge better ties at a time when diplomatic relations are at an all time low," Imori said.

"And while this is certainly a positive, the appointments of Tomomi Inada, the new female LDP policy chief, could potentially derail the future good work of the likes of Tanigaki and Nikai when it comes to Asia Pacific diplomacy, as Inada has a checkered history," said Imori.

He went on to explain that Inada has been a vocal defender of Japan's wartime aggression and has publicly disputed Japan's incontrovertible and admitted use of "comfort women" during WWII.

Sanae Takaichi, a former minister for gender equality in Abe's first Cabinet in 2006, who was named internal affairs and communication minister, is another high-profile female placement, comprising five female ministerial appointments Wednesday, which equals the record set by former Prime Minister Junichiro Koizimi in 2001.

Takaichi is known to have a particularly cozy relationship with Abe, and also espouses similar nationalistic views to Inada, having previously petitioned the government to replace the landmark Kono Statement -- a benchmark apology from Japan for the forcible wartime conscription and enslavement of "comfort women" -- and holds a "deluded idea of history," according to Imori.

"Abe's female appointments are good for his newly-crafted image as a leader who wants to see gender gaps reduced in a historically patriarchal Japan, but all his female appointments are ardent nationalists, so the LDP has, it could be suggested, taken a big step forward for womankind, but a potential step backwards for the future of Japan's diplomatic ties with its neighbors," concluded Imori.