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Political 'nightmare' haunts Tokyo stocks

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Paul Krugman, left, discusses economic policy with Japanese Prime Minister Shinzo Abe, right, and other officials on March 22.   © Kyodo

TOKYO -- The Japanese stock market started the calendar year with a steep downtrend. It has begun the new fiscal year in similar fashion, with investors wondering how Prime Minister Shinzo Abe will handle some big challenges.

     Will the government delay the next consumption tax increase, now scheduled for April 2017? Will it try to fire up the economy with a supplementary budget for the fiscal year that began last Friday? These are key questions, but something else appears to be troubling the market as well. Call it the nightmare of 2007 -- the period of political confusion that followed the ruling party's loss in an upper house election.     

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