Japanese Prime Minister Taro Aso said today he plans to call a general election on August 30th, despite the prospect that his long-ruling conservative party is headed for a historic defeat.
A Democratic Party victory in the national election would end half a century of nearly unbroken rule by the business-friendly Liberal Democratic Party (LDP) and raise the chance of resolving political deadlocks as Japan tries to recover from its worst recession since World War Two.
The decision to call the vote, which must be held by October anyway, follows a crushing loss for the unpopular Mr Aso's ruling party in a Tokyo election on Sunday that was seen as a barometer for the national poll.
"One never knows until an election what will happen," Mr Aso told reporters. "This time is no exception. We must fight even in a difficult situation."
Parliament's lower house would be dissolved next week to set the stage for the election, Hiroyuki Hosoda, secretary-general of Aso's LDP, told reporters.
Moves within the LDP to replace Mr Aso had been expected to grow after the party and its junior partner lost their majority in the Tokyo assembly.
But Japan has had four LDP leaders in four years, and a survey by NHK public TV said nearly 80 per cent of voters were negative towards another change.
Tokyo's Nikkei share average slid 2.6 per cent to its lowest close in eight weeks, hurt by the growing political uncertainty.
Reuters