InfoAnda - Japan PM calls election as LDP battles to hold on

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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > International > Article Home Business & Finance News U.S. Politics International Technology Entertainment Sports Lifestyle Oddly Enough Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Japan PM calls election as LDP battles to hold on Wed Jul 22, 2009 3:37pm EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Yoko Kubota and Yoko Nishikawa TOKYO (Reuters) - Japanese Prime Minister Taro Aso dissolved parliament's lower house on Tuesday for an August 30 election that polls show could see his conservative party ousted for only the second time in its more than half-century reign. A victory for the opposition Democratic Party of Japan would raise the chances of breaking a deadlock caused by a divided parliament that has stymied policy implementation as Japan struggles to emerge from recession. It would also usher in a government pledging to pay more heed to consumers than companies, to wrest control of policy from bureaucrats to cut waste, and to adopt a diplomatic stance less subservient to close ally the United States. "This is a major, revolutionary election to allow politicians to take the lead in Japanese government," opposition Democratic Party leader Yukio Hatoyama told party members. "We should face it with a sense of historic mission." Aso's LDP, which has ruled for all but 10 months since its founding in 1955, has relied heavily on bureaucrats to craft policies that analysts say helped build Japan's post-war economic "miracle" but later blocked reforms. Many investors in Japanese financial markets would welcome an end to the prolonged political stalemate, but some analysts worry that the opposition's spending plans will inflate an already huge public debt and push up government bond yields. "I think that for the short-term, hope that the Democrats taking power will cure the parliamentary paralysis and lead to smooth passage of bills and policies will outweigh any worries about uncertainty," said Noritsugu Hirakawa, a strategist at Okasan Securities. "Over the longer term, there are questions about how the Democrats will fund all their social programs, and this may eventually weigh on the market." Aso had announced his plan to call the election last week, so financial markets had little immediate reaction on Tuesday. PARTY CHAOS A spate of opinion polls show the opposition Democrats well ahead of Aso's LDP among voters, though close to 30 percent are still undecided. Aso's announcement of his election plan last week, a day after the LDP was trounced in a closely watched Tokyo assembly poll, sparked chaos in the LDP as critics tried to oust him. Party heavyweights blocked the move, but agreed Aso should appear at a meeting of LDP lawmakers to hear their complaints. In a news conference carried live on nationwide TV, Aso apologized for his failings and his party's internal chaos. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! 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