Tue, Jul 14, 2009 - Page 5 News List

Japanese PM Aso calls Aug. 30 election

PARLIAMENTARY CHALLENGE The Democratic Party of Japan has submitted a non-binding no-confidence motion to the lower house aimed at embarrassing Aso

AP AND REUTERS , TOKYO

Japanese Prime Minister Taro Aso told ruling party leaders yesterday he will dissolve parliament and hold general elections next month, following a crushing defeat for his party in Tokyo municipal polls considered a barometer of voter sentiment.

The decision came as opposition parties, emboldened by a surge in popularity, submitted a joint no-confidence motion in parliament against the prime minister and his Cabinet.

Aso told leaders of his Liberal Democratic Party (LDP) he would likely dissolve the powerful lower house of the legislature next week, with a general election to be held on Aug. 30, said Osamu Sakashita, a spokesman at the prime minister’s office.

The move was widely seen as a last-ditch attempt to keep the ruling party in power after the LDP and their coalition lost their majority on Sunday in the Tokyo Metropolitan Assembly. The assembly elections have been closely watched as a bellwether of what’s ahead for Aso’s party.

Moves within the LDP to replace Aso had been expected to grow following Sunday’s loss but LDP Secretary-General Hiroyuki Hosoda told reporters he saw no such moves now.

Meanwhile, the opposition, led by the Democratic Party of Japan, submitted the no-confidence motion to the powerful lower house of parliament, party spokesman Toshiaki Oikawa said. The motion was not expected to pass and was instead seen as a symbolic action to embarrass Aso.

Sunday’s vote does not directly affect the outcome of the upcoming national election, but the defeat deepened turmoil in the ruling party, with many lawmakers calling for fresh leadership heading into elections. Others were already jumping ship — lawmaker Kotaro Nagasaki submitted his withdrawal from the party yesterday.

A Democratic Party victory in the national election would end half a century of nearly unbroken rule by the business-friendly LDP and raise the chance of resolving political deadlocks as Japan tries to recover from its worst recession since World War II.

“If things go on as they are, this will be a severe defeat,” said Katsuhiko Nakamura, director of research at think tank Asian Forum Japan. “The focus is on who can change the situation, and the LDP will have trouble convincing people they can change things.”

The Democrats have pledged to pay more heed to the rights of consumers and workers than those of corporations and to pry policy-making decisions out of the hands of bureaucrats as a way to reduce wasteful spending.

An opposition win in the general election would smooth policy implementation by resolving deadlocks in parliament, where the opposition controls the upper house and can delay bills.

Some analysts say the Democrats’ large spending plans could inflate public debt and push up government bond yields, although the LDP has also passed massive stimulus spending.

“Even if the Democrats were to take power, they may be forced to pursue populist policies until next year’s upper house election, meaning that fiscal discipline could be pushed back, which would be negative for the bond market,” said Naomi Hasegawa, a senior fixed income strategist with Mitsubishi UFJ Securities.

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