Shinzo Abe, the four-time Prime Minister of Japan, tightened his grip on power in 2018 after he was re-elected president of the ruling Liberal Democratic Party (LDP) in September. The comfortable victory effectively extended Abe's term in office by another three years, setting him on course to become Japan's longest-serving prime minister before the end of next year.

With domestic political stability ensured, Abe signaled plans to push ahead his "Abenomics" policies of monetary easing, fiscal stimulus and wide-ranging structural reforms, and also a more controversial agenda focused on demographic issues.

The Japanese leader has made national defense one of his priorities, pledging to move ahead with a contentious plan to change the pacifist provision of the country's postwar constitution. His government is currently drafting a fresh defense strategy and procurement budget to strengthen Japan's capabilities in new domains such as space and cyber warfare. But his relentless move to boost Japan's military might has long been repudiated by Japan's Asian neighbors.

Abe continues to champion trade liberalization as a steadfast advocate of the Trans-Pacific Partnership (TPP) aimed at introducing high standards for regional economic integration. He has persuaded other TPP countries to continue with the pact despite the U.S. pullout. In July, Abe finalized a free-trade deal with the European Union.

Outreach to China

One of the key foreign policy highlights for Abe this year was his outreach to China. In October, he became the first Japanese Prime Minister to make an official visit to Beijing in seven years. Chinese President Xi Jinping, after his meeting with Abe, acknowledged that China-Japan relations are now on the "right track."

Emphasizing that the interdependence between the two Asian neighbors are on the growth trajectory, Xi described his meeting with Abe as a "historic opportunity" while the Japanese leader pledged to "work together… toward the peace and stability of the region and the world."

The meeting marked a slow recovery of relations, after they hit a low in 2012 amid territorial disputes involving islands in the East China Sea. The two countries also entered a number of agreements that include setting up more high-level official dialogues and improving senior health care.

Committed to the U.S.

However, Abe's foreign policy agenda remains committed to strengthening the Japan-U.S. alliance while networking with like-minded states in the Indo-Pacific region. Many analysts feel that the Japanese leader has arguably navigated the U.S. political transition under U.S. President Donald Trump better than any other world leader and succeeded in establishing personal ties with the American leader.

That camaraderie was most evident in the policy of isolating and pressurizing the leadership of the Democratic People's Republic of Korea (DPRK), but Trump's shift to diplomacy earlier this year caught Japan by surprise. While Abe endorsed Trump's summit with DPRK leader Kim Jong Un, he also cautioned against any concessions without concrete evidence of denuclearization.

Abe also appears to be walking a fine line on trade as Trump is eager to reduce the bilateral trade deficit with Japan.

Challenges in 2019

Observers caution that Trump and his policies could be the biggest challenge for Abe in 2019 amid the uncertain future of China-US trade ties.

The issues that the Japanese prime minister will have to deal with earnestly next year include his plans to revise the pacifist constitution, reforming immigration policy, and pushing up sales tax. In between, Abe will have to usher in the new Emperor and also monitor the Renault-Nissan crisis following the arrest of ex-CEO Carlos Ghosn over financial misconduct charges.

In an already complex year, if the U.S. president chooses to confront Japan over trade, Abe will be staring at a looming problem that threatens to cloud Tokyo's spell of economic resurgence since the 1980s.

On the domestic front, the labor market and social security is predicted to feature most prominently during Abe's reign. Concerned by a labor shortage, Abe is pushing to crack open Japan's restrictive immigration laws while also advocating jobs for life. In an interview with Nikkei newspaper, Abe said he wanted to focus the next year on creating an environment for people to stay working throughout their lives.

Also, in his attempt to boost Japanese Self-Defense Forces, the prime minister might be confronted with an uphill battle from civilians and Japan's Asian neighbors. 

This is the second article of our "World Leaders" series, which takes a look at eight people who shaped the global political discourse in 2018. These figures dominated the year's headlines through high-profile appearances and maneuvering, forging new relationships and severing old ones. We published the profiles of Kim Jong Un and Moon Jae-in over the past two days. Tomorrow we'll talk about Angela Markel's performance in 2018 and the future in store for her. Stay with us.