It was a bullet that some people said would change Japan forever, and it certainly had people outside taking a closer look at the world's third largest economy. For me, hearing the news that Shinzo Abe had been shot on July 8 was a shock similar to the events of Sept 11, 2001, which most people agree changed the world.
The assassination of Japan's longest-serving prime minister stunned the country and the world. While Americans endure gun violence at frighteningly high frequency, it is almost unheard of in Japan's sophisticated culture. When a prominent political figure is gunned down, particularly in public on the eve of an election, it represents a nightmare that could haunt Japan for years.
History will record Abe's tenure of nearly nine years as one of the most important periods in modern Japanese history. The grandson of former prime minister Nobusuke Kishi, Abe first served from 2006 to 2007, before resigning after his party's poor performance in upper house elections.
He made a remarkable comeback in 2012, reclaiming the leadership of the Liberal Democratic Party (LDP) and winning the general election that December. Subsequent LDP wins in 2014 and 2017 entrenched Abe in power over a weak and divided opposition.
He introduced his signature "Abenomics" policy, based on massive deficit spending, easy monetary policy and attempts at structural reform. However, twice raising the consumption tax undermined these attempts to lift the economy out of its decades-long stagnation.
Japan under Abe showed regional leadership when in 2017, Donald Trump withdrew the US from the Trans-Pacific Partnership initiated by his predecessor Barack Obama. Tokyo successfully led the effort to revive the pact under a new name.
His forward-looking foreign policy was also praised. The Abe administration first raised the concept of the Quad security partnership involving Japan, the US, Australia and India. And in 2016 he coined the phrase "free and open Indo-Pacific", now a favourite of Washington, to preserve the rules-based liberal order in international relations.
Since Abe resigned in 2020 citing poor health, Japan has had two prime ministers, suggesting the political system has yet to regain its footing. He remained a powerful figure in the LDP as leader of its largest faction.
After the July 10 election in which the LDP increased its share of upper house seats, Prime Minister Fumio Kishida confirmed he would take up the issues his former boss was passionate about. That includes changing the constitution to add an explicit reference to the Japan Self-Defense Forces -- an idea that remains divisive among voters.
Interestingly, the approval rating for the Kishida government, which has been power since October 2021, hit a record high days after the Abe assassination, hitting 63.2% in a Kyodo News survey.
That number could embolden Mr Kishida to pursue his own "new capitalism" agenda, which promises a fairer and greener economy, with no need to quickly change course on basic economic policy including central bank stimulus.
It could also add momentum to calls to revise the pacifist constitution, unchanged since it was drafted under US occupation following the country's defeat in World War II.
But any dramatic transition during a period of war and hardship around the world will be a real challenge for Japan's leadership. The US and China are experiencing internal turmoil along with economic hardship, while galloping inflation has economists and investors talking about a global recession.
In light of his party's recent electoral success, the question for Mr Kishida is how to make the most of his mandate. Top of the list is tackling the immediate rise in Covid-19 cases and reviving the torpid economy. Also, Japan has fundamental issues to address, namely a declining birth rate, weak business confidence and a worsening gender gap.
A World Economic Forum report released last Wednesday placed Japan a dismal 116th among 146 countries in the gender gap rankings. Its ranking in the World Bank's Ease of Doing Business table has sunk to 29th in 2020 from 20th in 2012. Simplifying immigration procedures or streamlining an inflexible stock offering process would help address concerns of foreign firms operating in the country.
All of the above-mentioned policies need to be pursued with a demonstration of political to gain public trust. Japan needs to unite with the ruling and opposition parties working together to find points of agreement in this critical period and to ensure prosperity in the longer term.
