Inflation cuts into Kishida's support ahead of Japanese Upper House election

TOKYO (BLOOMBERG) - Support for Japanese Prime Minister Fumio Kishida's Cabinet slid in a series of media surveys carried out over the weekend, as respondents indicated dissatisfaction with his handling of rising prices weeks ahead of an election.

The premier's support fell 6 percentage points to 60 per cent, the lowest since February, in a poll carried out by the Nikkei newspaper June 17-19, while the proportion saying they did not support his Cabinet leapt 9 percentage points to 32 per cent. About 69 per cent of respondents to the survey said they did not approve of his handling of inflation.

Mr Kishida is heading into a campaign for a key Upper House election set to be held July 10.

A strong performance in the vote for the less-powerful of Japan's two houses would give the Premier as long as three years without the need to face another test at the polls.

A separate poll by TV news network ANN also found support for the Cabinet had fallen 2 percentage points to 49 per cent, while a survey published Saturday by Mainichi found a 5 percentage point drop to 48 per cent, with about two-thirds of respondents saying they were having trouble making ends meet due to inflation.

Still, opposition parties show little sign of being able to take advantage of the dilemma facing Mr Kishida and his long-ruling Liberal Democratic Party (LDP).

The main opposition Constitutional Democratic Party is calling for a rethink of Bank of Japan (BOJ) policy, but only 7 per cent of respondents to the Nikkei survey said they supported the party, flat on the previous month and compared with 45 per cent for the LDP.

Japan's April core inflation rate was 2.1 per cent, far below levels seen in the United States, with May figures due to be released on Friday (June 24). Monetary policy has become an unusual bone of contention in the run-up to the vote, with 46 per cent of respondents to the Nikkei poll saying the BOJ should not continue its ultra-easy policy, compared with 36 per cent saying it should. The BOJ's monetary policy divergence from US tightening has accelerated the yen's nosedive.

Both the government and the BOJ have expressed concern about the currency's rapid fall and the government has provided handouts for low-income households to try to alleviate the effect of price rises.

Mr Kishida told a Fuji TV programme on Sunday that the BOJ should stick to its policy because any rise in interest rates could increase the burden on small and medium-sized businesses.