The impressive performance of Japan's ruling coalition government at parliamentary elections on Sunday is a reminder to Prime Minister Abe that his first and foremost priority remained the economy, not political reforms.
Abenomics, the set of radical economic policies designed to end Japan's deflation funk, has experienced a number of setbacks in its three-and-a-half-year existence, but the ruling coalition party still managed to secure 70 out of the 121 seats up for grabs in the upper house at Sunday's vote. That means the Liberal Democratic Party (LDP) and the New Komeito Party now have a majority in both houses of parliament.
Voters endorsed Abenomics despite widespread dissatisfaction with controversial legislation that Abe intends to execute. The PM wants to revise the nation's post-war pacifist constitution to enable military action under the doctrine of collective self-defense amid China's growing military clout. Having now obtained a parliamentary majority, Abe could officially start the constitutional amendment process, set to be one of his key legacies, alongside Abenomics.
But unless the economy improved, Abe could not afford to push through with any controversial reforms, Martin Schulz, a senior economist at Fujitsu Research Institute, told CNBC's "The Rundown." The leader first needed to deliver on his economic promises to voters and be as expansionary as possible, which meant unveiling robust fiscal stimulus to shore up spending and push consumer prices higher, he said.
"Most [voters] are concerned about economic revival and social security reform, and that there is very little public appetite for constitutional reform. It is unlikely that the Abenomics policies and the economic policy agenda will be abandoned in exchange for constitutional reform after the upper house election," summed up Societe Generale in a Monday note.
The government plans to roll out a stimulus package that could exceed $99 billion, Reuters reported on Sunday.