Japan’s prime minister Fumio Kishida comfortably won last October’s general election for the lower house of the Diet for the ruling Liberal Democrats (albeit with a slightly reduced majority).  And he is headed for victory in this Sunday’s upper house election, likely to extend the number of seats it holds to 60 out of 125 contested.  So politically, Kishida is in a strong position.

Former banker Kishida campaigned on a program that he claimed was going to revive the Japanese economy with what he called a “new capitalism”, supposedly a rejection of ‘neoliberalism’ as operated by previous PMs like Abe. Instead, he would reduce inequality, help small businesses over the large and ‘level up’ society.This would break with Abe’s emphasis on ‘structural reform’ ie reducing pensions, welfare spending and deregulating the economy.

How is ‘new capitalism’ doing in Japan after eight months?  Not too well.  The Japanese economy contracted…