September 11, 2005

Japan’s Koizumi wins election landslide

By Linda Sieg

TOKYO, Sept 12 (Reuters) - Japanese Prime Minister
Junichiro Koizumi's long-ruling party won a stunning landslide
victory in Sunday's general election, Japanese media said,
giving the U.S. ally a broad mandate to press on with
market-friendly reforms.

The Liberal Democratic Party, which has been governing in
coalition, was assured of winning at least 276 seats in the
480-seat chamber, projections by public broadcaster NHK showed.

That was up from 249 seats before the election. Media exit
polls showed the party winning more than 300 seats.

NHK also said the LDP and its coalition partner, the New
Komeito party, had locked in a total of 304 seats, allowing
them to dominate the powerful lower chamber by having a
majority on all committees.

The result was a striking victory for Koizumi, a
media-savvy maverick who gambled his career in a populist
appeal to voters to back his plan to privatize Japan's postal
system, a financial services giant that includes a postal
savings bank and insurance business with a combined $3 trillion
in assets.

The 63-year-old Koizumi, a telegenic veteran with a knack
for punchy slogans but a mixed record on implementing change,
called the election after LDP lawmakers helped the opposition
defeat bills to privatize Japan Post in the upper house.

"I have advocated postal reform for many years. The
parliament said it was an absurd argument. The people have said
it was the right thing," Koizumi, looking relaxed in a gray and
white opened-necked shirt, told reporters at LDP headquarters.

His decision to strip LDP rebels of party backing and send
what media called "assassin" candidates to take on the
"traitors" created a buzz in the normally apathetic electorate,
making the poll as much a referendum on Koizumi himself as on
his policies.

"In the past, it seemed most things were down in backroom
deals. That attitude seems to be changing," said Tokyo office
worker Norihiro Ishihara, 28. "Koizumi is easy to understand.
It's not that I like Koizumi, it's just that I like his style."

The victory for Koizumi's two-party coalition will please
Washington, where he is seen as a staunch friend for backing
the U.S.-led war on Iraq, and will be welcomed by investors in
Japanese financial markets, who want reform to stay on track.

But there will be little cheering in China and South Korea.
Ties with both neighbours, victims of Japan's past militarism,
have chilled since Koizumi took office in 2001 due to
perceptions of rising Japanese nationalism and regional


"Koizumi Theater," as the media called it, fanned interest
in the election and TV Asahi estimated turnout would total
about 67 percent, up from 60 percent in the 2003 lower house

NHK showed the opposition Democratic Party was assured of
winning 96 seats. The public broadcasters' exit poll put the
party's top figure at 127, down from 175 in the last

The devastating defeat was likely to raise concerns about
the future of a two-party system in Japan, where the LDP has
ruled for most of the past five decades.

The Democrats, led by Katsuya Okada, 52, had argued that a
change of government was needed to achieve reform and that
issues such as pension reform mattered more than the post

"Our policies weren't wrong, but I have to reflect on the
fact they did not get across," Okada said on television.

Koizumi has long promised to change the hide-bound LDP or
destroy it in the attempt. The victory will strengthen his hand
over remaining old guard rivals who consider their main job to
be distributing benefits to the hinterlands and interest

"It feels as if I have destroyed the old LDP and it is a
new party," Koizumi said.

Analysts said Koizumi would come under pressure to stay on
after his term as LDP president ends in September 2006, but he
said he had no plans to do so.

"I will do my best for the next year and then I want to
step down," he said, adding his successor should be someone who
would carry on with reforms.

Koizumi has vowed to resubmit the postal bills if his
coalition won, and several upper house rebels have already said
they would back the legislation if the coalition took a

Many analysts noted, however, that Koizumi has yet to flesh
out programmes beyond postal privatization, a passion that has
dominated his career -- including a stint as postal minister.

"He will likely take care of postal privatization bills
within the year, but what does he plan to do after that?" said
Jiro Yamaguchi, a political scientist at Hokkaido University.

Along with the LDP's 249 seats, coalition partner New
Komeito had 34 before the 480-member lower house was dissolved
compared with the Democrats' 175. But Koizumi refused to put 37
rebels who voted against postal reform on the party ticket.

Tokyo share prices have climbed nearly 10 percent since the
election was called on August 8, but investors will be watching
to see how Koizumi follows through.

"It's also important to note that the point of the election
was to strengthen Koizumi's reform mandate, so we'll be looking
how he delivers on this front," said Luke Waddington, chief
forex dealer at Royal Bank of Scotland in Tokyo.

(Additional reporting by George Nishiyama, Masayuki Kitano,
Isabel Reynolds, Elaine Lies, Shinichi Kishima, Tamawa Kadoya)