Bloomberg columnist William Pesek thinks it might when Shinzo Abe replaces Junichiro Koizumi as Japanese prime minister this week.
He worries that the country may lapse back to its old ways under Abe. This despite the fact that Abe is Koizumi's hand-picked successor:
There also are worrying signs that Japan Inc. is making a comeback. One is how the Japanese establishment circled the wagons to halt recent hostile takeover attempts. It has prompted a renewal of the practice of companies buying each other's shares as a protective measure.
Over the past 12 months, cross shareholdings have been increasing, according to Jesper Koll, chief Japan economist for Merrill Lynch & Co. "It's the corporate culture. Why are we getting Abe after Koizumi? It's back to the old ways. You're going back toward more cross shareholdings and lifetime employment at a blue-chip company."
Will Junichiro Koizumi's (w. President Bush) exit from politics KO Japan's economy?
I think Pesek's concerns are valid. And with Japan's powerful LDP party the dominant player in the nation's politics, there was always the concern that "Japan Inc." would creep back.
In fact, the pace of corporate governance in the Land of the Rising Sun has been frustratingly slow. Especially for those of us who started buying Japanese stocks in the 1990s. What's more, even with the recent improvement in Japan's corporate governance, investing in the country remains a company-by-company thing.
But I also think that change in Japan has been much more of a "bottom-up" phenomenon than many realize. Many of the boardroom battles taking place in the country involve Japanese shareholders as well as foreigners.
So, for the moment at least, I'll give Mr. Abe the benefit of the doubt.
And a tip of the hat to Mr. Pesek for a fine column.
Shinzo Abe, Japan's New PM