The Nikkei stock index's rise to an all-time high is unlikely to help buoy Japanese Prime Minister Fumio Kishida's government, which has been mired in political funds and other scandals, as the public considers the bullish market as unrelated to his policies.

Some lawmakers have said Kishida may dissolve the House of Representatives for a snap election before the ruling Liberal Democratic Party's leadership race later this year if the surge in stocks contributes to improving approval ratings for his Cabinet.

But such a scenario is improbable, even if Tokyo shares keep climbing, given there are currently few positives Kishida can point to in order to increase his popularity, political experts said, adding he could eventually be placed in a predicament in the near future.

On Thursday, Japan's benchmark 225-issue Nikkei Stock Average exceeded its previous peak level of 38,915.87, which was recorded in December 1989, as the sharp depreciation of the yen has pushed up the profitability of the country's exporters.

A stock monitor in Osaka on Feb. 22, 2024, shows the 225-issue Nikkei Stock Average ending at an all-time high, breaking the previous record set 34 years ago. (Kyodo) ==Kyodo

"The Japanese economy is starting to move forward" on the back of the government's economic policies such as "measures to spur investment and innovation," Kishida told reporters at his office later in the day, declining to comment on daily share moves.

Since the late Shinzo Abe became Japan's prime minister in December 2012, the yen has been on a downward trend, largely due to the former prime minister's economic policy, which was dubbed "Abenomics" and included aggressive monetary easing and massive fiscal spending.

A falling yen is usually a boon for exporters as it makes Japanese products cheaper abroad, boosting the value of overseas revenues in yen terms. In the past 12 years, the Nikkei has more than doubled as Japan's exports, a key driver of the economy, have recovered.

Many analysts point out, however, that the jump in Tokyo shares is attributed not to the economic and monetary policies carried out by the government and the Bank of Japan but to a "risk-on" mood, influenced by robust stock prices in foreign financial markets.

Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ Research and Consulting, said Japanese citizens are not satisfied with the current economic situation as they do not have faith in the Kishida administration or its policies.

In fact, Japan lost its status as the world's third-biggest economy to Germany in 2023 and unexpectedly slipped into recession in the last quarter of last year, with price hikes and sluggish wage growth eroding consumer sentiment.

Under the circumstances, support ratings for Kishida's Cabinet have remained at their lowest levels since its launch in October 2021. Despite higher stock prices, the latest Kyodo News poll showed the approval rating stood at 24.5 percent in early February.

Kishida's government has become more unpopular as the LDP has come under intense scrutiny amid allegations that several factions neglected to report portions of their incomes from fundraising parties and accumulated slush funds to distribute to their members.

After the scandal was revealed late last year, 10 individuals belonging to the three factions, including the one headed by Kishida until December, have been indicted or issued summary indictments by prosecutors for violating the political funds control law.

In addition, the Kishida administration has drawn criticism over suspicious ties between two Cabinet members and the controversial Unification Church, which has been condemned for its aggressive fundraising and other exploitative practices.

Education minister Masahito Moriyama, whose ministerial portfolio also covers religious affairs, has admitted to signing a document pledging support for policies championed by the Unification Church in the run-up to the general election in October 2021.

Japanese Prime Minister Fumio Kishida (C) prepares to attend a Cabinet meeting at the premier's office in Tokyo on Feb. 22, 2024. (Kyodo) 

Chief Cabinet Secretary Yoshimasa Hayashi, meanwhile, has acknowledged that he met with individuals related to the Unification Church, often labeled as a cult, in his local office in Yamaguchi Prefecture before the election.

Kishida, who is believed to be keen to continue serving as prime minister, hopes that he will lead the LDP to victory in the next lower house election and will be re-elected uncontested in the party's presidential election scheduled in September.

The present four-year terms for lower house members expire in October 2025 unless Kishida dissolves the chamber. Under Japan's Constitution, the prime minister has the authority to decide whether to dissolve the lower house.

While Kishida is also aiming to restore his Cabinet's popularity by pitching an upcoming state visit to the United States in April, it could prove difficult for him to turn around his political fortunes considering the scandals his administration has faced so far.

Tomoaki Iwai, a professor emeritus of political science at Nihon University, said Kishida is in a difficult position in terms of making a decision on dissolving the lower house, but if he remains "indecisive, many LDP lawmakers will doubt his leadership."

Looking ahead, attention is now on three by-elections to fill vacant seats in the lower house in late April. Depending on the results, a move to oust Kishida from power could take place within the LDP, according to political pundits.

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