JAPAN: One day after upper house election the country reacts to Prime Minister Naoto Kan's party losing their majority in parliament's upper house

Record ID: 465558

  • Title: JAPAN: One day after upper house election the country reacts to Prime Minister Naoto Kan's party losing their majority in parliament's upper house
  • Date: 13th July 2010
  • Summary: TOKYO, JAPAN (JULY 11, 2010) (REUTERS) DEMOCRATIC PARTY OF JAPAN (DPJ) LAWMAKERS PUTTING ROSETTES ON BOARD AT DPJ'S ELECTION HEADQUARTERS MORE OF DPJ LAWMAKER PUTTING ROSETTES ON BOARD JAPANESE PRIME MINISTER NAOTO KAN AT DPJ'S ELECTION HEADQUARTERS MORE OF KAN AT THE HEADQUARTERS
  • Embargoed: 28th July 2010 13:00
  • Keywords:
  • Location: Japan
  • Country: Japan
  • Topics: Domestic Politics
  • Reuters ID: LVA9ROZWCUSUEQ9CDRDAMWACAK9Y
  • Story Text: Tokyo residents on Monday (July 12) took stock of the ruling Democratic Party's trouncing in upper house elections the night before, many saying the results were not all that surprising.
    Japanese Prime Minister Naoto Kan's government suffered a major blow in Sunday's (July 11) election and now face a policy deadlock that could thwart efforts to curb massive public debt and engineer growth.
    "I think the outcome was expected because of the government's financial issues as well as issues on Okinawa, which everyone's been talking about," Michiko Ikenoya, 60-year-old businesswoman, told Reuters in the streets of the Ginza shopping district.
    Voters dealt Kan's Democratic Party of Japan (DPJ) a stinging rebuke, depriving it and a tiny ally of an upper house majority less than a year after the DPJ swept to power promising change.
    The DPJ won just 44 seats, far short of Kan's goal of 54, and its partner the People's New Party got none, media said.
    The main opposition Liberal Democratic Party (LDP) won 51 seats.
    Many others said the premier's flip-flopping nature discouraged them from supporting his party.
    "Kan's been saying different things every time and I think that really led to losing public support," added 21-year-old student Kenya Komatsu.
    The Democrats still control the more powerful lower house. But they need help from other parties to push bills through the upper house as they struggle to end decades of stagnation in the world's No.2 economy and to cut the massive public debt.
    Most of Japan's debt is held by domestic investors, who are less sensitive to credit ratings agency downgrades than foreign investors, but that is slowly changing as the population ages and household savings fall.
    Kan, a former finance minister, had made fiscal reform a top priority, floating a possible doubling of the 5 percent consumption tax.
    The main opposition Liberal Democratic Party also favours a rise in the sales tax to 10 percent, but the poor election results could make it harder for Kan to push forward debate on the politically touchy topic.
    The government last month unveiled a mid- and long-term fiscal reform strategy. But the plan lacked specific ideas on how to meet ambitious targets such as balancing the budget and reducing its debt-to-GDP ratio.
    A majority of voters agree fiscal reform is needed. But his apparent flip-flopping on a possible additional tax burden has put off many voters.
    "Just like everyone else, I really think Kan's opinion on taxes influenced the votes. However, I do support the Democratic Party of Japan so I'm really hoping they would do better in a longer term," Yuko Noda, 51-year-old housewife, told Reuters.
    Analysts say the ruling DPJ might face a never-ending political deadlock after the election.
    "Well I think in many ways it's gonna mean an even longer period of frustration in Japanese politics," Phil Deans, Professor of International Relations at Temple University, told Reuters in Tokyo on Monday.
    "Again, we got a situation in Japan where no party is in overall control, where whoever's leading the country's got to make compromises, it's got to go into coalitions, and it's gonna be another period of deadlock and confusion."
    Two of Kan's LDP predecessors threw in the towel after less than a year in the face of a similar divided parliament.
    Public support for the DPJ rebounded when Kan took over last month, but tumbled almost as quickly after he floated a rise in the sales tax from 5 percent to help rein in debt.
    "I think when you look at the international reaction to this, you can probably hear the groans around the world. Yet again, the world's second largest economy has got a weak leadership, it's got uncertainty; there's no clear clear direction for Japan," said Deans.
    "I think people have given up on any chance of seeing Japan exercise any leadership, but that at least won't it to have some kind of stability, some attempt to addressing its domestic problems. That's gonna be even more unlikely after yesterday's election," he added.
    The election defeat of the ruling coalition is unlikely to shift Japan's foreign and security policies drastically.
    The Democrats took power promising to steer a diplomatic course more independent of close ally the United States, but efforts by Kan's predecessor Hatoyama to do so hit a roadblock when he failed to find an alternative to keeping a U.S. Marine airbase on the southern Japanese island of Okinawa.
    Tokyo and Washington have basically agreed to implement a 2006 agreement to shift the Marines' Futenma airbase to a less crowded part of Okinawa, host to about half the U.S. troops in the country.
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