On June 24, DP President Katsuya Okada released the following statement.

Today, the results of the national referendum to decide whether the United Kingdom should remain in the European Union (EU) or not were announced.  Although it is the decision of the British people, I find it extremely regrettable that the United Kingdom’s departure from the EU has been confirmed.  I am extremely concerned that this decision will have a huge impact not only on the world economy, but on international politics and the European community as a whole.

Firstly, exchange rates and stock markets have been thrown into complete confusion.  In the short term, the Japanese government and the Bank of Japan need to take action in concert with other nations, such as by U.S. dollar funds-supplying operations, as well as by taking immediate measures to ease the shock caused by the strengthening yen and falling share prices, such as taking an appropriate response to deal with sudden fluctuations in exchange rates.

The mid to long term response is more important.  In the past three and a half years the Abe administration, under the auspices of an economic environment blessed with a weak yen and high share prices, has relied greatly upon monetary easing and fiscal stimulus and neglected the growth strategy and structural reforms.  As a result, Japan low economic growth of 0.8% in real terms and the government has twice postponed the scheduled increase in consumption tax rates.

During this election, I have repeatedly pointed out that Abenomics, which has been driven by the twin engines of a weak yen and high share prices, has changed course due to the recent strong yen and low share prices, and has now ground to a halt.  It is highly likely that the news of the United Kingdom’s decision to leave the EU will cause further strengthening of the yen and lower share prices.  I feel it is time for us to acknowledge that Abenomics’ time has come and gone. 

The Government Pension Investment Fund (GPIF) that manages the Japanese people’s pension funds is a source of concern.  The GPIF is said to have suffered losses of 5 trillion yen, but the current crisis will only increase these losses.  The unrealized profits that have accumulated will be wiped out and the risk that a gaping hole will be opened in the pension funds has increased.  Many of the public are extremely concerned about the way in which the GPIF is being managed, and that is inviting a fall in consumption.  The Abe administration should immediately disclose the performance record of the GPIF, as well as reducing the ratio of stock holdings, which has been doubled.

In order for us to overcome the risks posed by the United Kingdom leaving the EU, and realize sustained economic growth, we must now execute a shift in our economic policy.  By investing in people through policies aimed at children and child-rearing and education, realizing the enhancement of the social security system, including pensions, we will create a society in which people can live their lives free from anxiety, and have hope for the future.  This will cause consumption to increase, generate investment, and lead to growth.  The Democratic Party will continue to call for the achievement of "both distribution and wealth" through the House of Councillors campaign.