Japan expected to oust ruling party

Frustrated Japanese voters look set to oust the long-ruling conservative party in an election on Sunday, handing the novice opposition…

Frustrated Japanese voters look set to oust the long-ruling conservative party in an election on Sunday, handing the novice opposition the job of reviving a weak economy and coping with a rapidly ageing population.

A victory by the Democratic Party of Japan (DPJ) would end more than 50 years of almost unbroken rule by prime minister Taro Aso's Liberal Democratic Party (LDP) and break a deadlock in parliament, where the opposition and its allies won control of the less powerful upper chamber in 2007 and can delay bills.

The DPJ has pledged to refocus spending on households with child allowances and aid for farmers while wresting control of policy from bureaucrats, often blamed for Japan's failure to address problems such as a creaking pension system.

They also want to forge a diplomatic stance more independent of close security ally the United States while building better ties with Asia, often frayed by bitter wartime memories.

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Democratic Party of Japan leader Yukio Hatoyama, the wealthy 62-year-old grandson of a former prime minister, told voters on Saturday the election would change Japanese history.

"This is an election to choose whether voters can muster the courage to do away with the old politics," Mr Hatoyama said.

Media surveys suggest the DPJ could win by a landslide in what would be akin to a political earthquake in Japan, although some analysts say the predictions might be excessive.

Weather could even be a factor if a tropical storm threatening to turn into a typhoon and headed for Japan dumps heavy rain and keeps voters from polling booths.

High turnout is generally thought to benefit the opposition.

Financial markets would generally welcome an end to the two-year parliamentary deadlock.

But analysts worry spending plans by the Democrats, a mix of former LDP members, ex-Socialists and younger conservatives founded in 1998, will inflate Japan's already massive public debt and push up government bond yields.

The party has vowed not to raise the 5 percent sales tax for four years while it focuses on cutting wasteful spending.

A new government will face the challenge of nurturing a nascent recovery from Japan's worst recession since World War Two while tackling long-term problems such as a greying population.

Japan is ageing more quickly than any other rich nation, inflating social security costs. More than a quarter of Japanese are set to be 65 or over by 2015.

"We need a change in government. I think the Democrats will really tackle the pension problem," said 60-year-old Sachiko Nogi in Tokyo, where Hatoyama made his final pitch to an enthusiastic crowd. "If it's not fixed, there's no tomorrow."

The economy returned to growth in the second quarter, mostly due to short-term stimulus around the globe, but the jobless rate hit a record 5.7 percent in July.

"For voters, the biggest issue by far ... is the economy," the Japan Times newspaper said in a weekend editorial. "Voters must decide Sunday whether to support the LDP's conventional method or the DPJ's more novel approach to revive the economy."

Mr Aso told voters today the Democrats would be unable to manage the economy while the business-friendly LDP had better plans for growth. The ruling party has favoured steps to promote corporate activity rather than direct payout for consumers.

"There is not one line in the Democratic Party's manifesto about economic growth," Mr Aso said.

A victorious Hatoyama is expected to quickly cement a coalition with two tiny allies whose cooperation is needed to maintain control of the upper house and then form a cabinet.

Japan's new leader will want to attend a series of international meetings including a UN General Assembly gathering and a G20 summit in Pittsburgh later in September.

Voter anger over scandals, policy zig-zags and a perceived failure to address tough long-term problems has eroded support for the LDP, but enthusiasm for the Democrats has been lukewarm.

That means keeping voters happy ahead of an upper house election less than a year away is likely to be a top priority.

Reuters