Sunday, August 30, 2009

Japan votes in election, opposition tipped to win

By Linda Sieg, Chief Political Correspondent, Japan

TOKYO (Reuters) - Japanese vo

ted in an election on Sunday that looked set to oust the long-ruling conservative party and give the untested opposition the job of nurturing a recovery from the country's worst recession since World War Two.

Media surveys suggested the Democratic Party of Japan (DPJ) could win the lower house election by a landslide in what would be a political earthquake in Japan, although some analysts say those predictions may be excessive.

A DPJ victory would end more than 50 years of almost unbroken rule by the 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.

"I don't like what's going on now in this country. Things have to change," said Kazuya Tsuda, a 78-year-old retired doctor in Tokyo who voted for the Democratic Party.

"I don't think the Democrats can do everything they have pledged under their platform, but it should be better than the current political situation under the LDP."

Democratic Party 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," he said.

Japanese media will annouEJapanese media will annouEJapanese media will announce the results of exit polls after voting ends at 8 p.m. (1100 GMT). Later in the evening they will issue further projections based on partial vote counts.

TROPICAL STORM

A tropical storm was approaching Tokyo, and the weather could be a factor if it brings gales and rain that keep voters at home. A high turnout is generally believed to benefit the opposition.

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

The party wants to forge a diplomatic stance more independent of the United States and build better ties with Asia, often strained by biia, often strained by bitter wartime memories.

"I don't think the LDP can change anything," said Ryoji Kawakita, a 63-year-old white-collar worker who voted for the Democratic Party. "I think, even though it will be difficult, the DPJ might be able to achieve change because they have the will."

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

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 massive public debt and push up government bond yields.

Japan is aging more quickly than any other rich country, inflating social security costs. More than a quarter of Japanese will be 65 or older by 2015.

RETURN TO GROWTH

The economy returned to growth in the second quarter, mostly because of short-term stimulus around the world, but the jobless rate rose to 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.

Incumbent Prime Minister Taro Aso has said the Democrats would be unable to manage the economy and the business-friendly LDP had better plans for growth. The LDP has favored steps to promote corporate activity rather than giving cash to consumers.

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

If victorious, Hatoyama is expected to quickly cement a coalition with two tiny allies whose cooperation is needed to maintain control of the upper house.

A new leader will want to attend a series of international meetings including the U.N. General Assembly and a G20 summit in Pittsburgh in September.

A key challenge for the next government will be managing ties with China, forecast to overtake Japan as the world's second-biggest economy next year.

(Additional reporting by Olivier Fabre, Rie Ishiguro and Colin Parrott, Editing by Dean Yates and Rodney Joyce)

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