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Kishida’s ‘new capitalism’ is easier said than done

TOKYO – The Fumio Kishida stock market bounce already has a “dead cat” quality to it.

This is finance industry vernacular for a temporary jump in asset prices that’s followed by a resumption of bearish sentiment. The odds are the Nikkei Stock Average is looking at a similar trajectory once it dawns on investors how little fresh thinking Prime Minister Kishida’s government is bringing to power.

Kishida was championed by Liberal Democratic Party (LDP) powerbrokers because he’s the “safe” choice. Markets wanted Taro Kono, the former minister and Covid-19 czar who put a faltering vaccination program on track.

Japan went from trailing Myanmar earlier this year to approaching a US- and Europe-beating 75% vaccination rate.

In the weeks after Kishida’s predecessor Yoshihide Suga resigned on September 3, the Nikkei shot to 31-year highs on hopes a more activist leader – like Kono – might accelerate structural reform.