Japan finance minister Yoshihiko Noda on Tuesday was elected as the country’s sixth new prime minister in five years, even as the nation suffers from many economic problems and high debt levels.
“Yoshihiko Noda, the incoming Japanese Prime Minister, brings with him a good track record as a Finance Minister. His reputation as a fiscal hawk should help maintain confidence in Japan’s debt sustainability,” Societe Generale said in a note.
The first important task before him is to quickly and smoothly pass the third supplementary budget, which is aimed at boosting economic activities in Japan in the next few quarters.
“Beyond the supplementary budget, Mr Noda has an even more difficult task of ensuring fiscal prudence while maintaining growth. As a well-known fiscal hawk, he would lose credibility if he gives up on this task,” the note said.
Further, Noda has to demonstrate that he can lead the Democratic Party of Japan (DPJ) to an electoral win, a skill he has little track record of so far.
“If he succeeds in all three, he could last much longer than his 5 predecessors. While long tenure seems so hard to achieve for Japanese Prime Ministers, we think Mr Noda has good potential,” Societe Generale said.
Unless we have a political accident, we do not see any obstacle in his path until September 2012 when his term as the DPJ chief will expire, the note added.