New | From Abenomics to Abegeddon: How will shrine visit affect Japan’s economy?

Until Christmas, Shinzo Abe’s eponymous Abenomics programme to rescue Japan from decades of deflation and low growth was an important success, according to most economic commentators, among them the International Monetary Fund, investors on the Tokyo stock market, who took it to a six-year high and 55 percent gain in 2013, and Japan hedge fund investors, who were the world’s best performers.

But then on 26 December, on the first anniversary of taking over as Japan’s prime minister, Abe in a fit of hubris or nationalistic fervor visited the controversial Yasukuni Shrine where war criminals are enshrined along with 2.4 million ordinary Japanese war dead.

In the space of an hour Abe changed the economic and political equation at the same time, from Abenomics to the risk of Abegeddon. He sparked a new verbal war with Japan’s neighbours, but with his visit he risked something hotter that could cause his economic programme to crash in flames.

One of Asia’s most respected former diplomats and commentators, Kishore Mahbubani, recognised the risk and declared that Japan and China “seem locked in an irreversible, dangerous downward spiral.” The title of his article, published by Bloomberg was, “How to prevent a war between China and Japan”. Unfortunately Mahbubani’s quite sensible suggestions seem far away from the agenda of either country.

Abe of course made light of any risks and claimed that his intention was entirely peaceful. He simply wanted to report to the souls of the dead on his first year’s achievements, and he claimed, “I made my visit to pledge to create an era where people will never suffer from catastrophe in war.”

His visit immediately provoked howls of protest from China and Korea. The US, Japan’s strongest ally, expressed its “disappointment”, a strong word for an ally to use in protest.