New era for Japan as DPJ triumphs

Japan’s centre-left opposition Democratic party won a crushing victory over the long-ruling conservative Liberal Democrats on Sunday, redrawing the political landscape of the world’s second largest economy.

The result – the first time since the LDP’s founding in 1955 that any other party has won an electoral majority in the Diet’s lower house – gave the DPJ a mandate to pursue its campaign policies of taming the nation’s powerful bureaucrats and rolling out generous child allowances and welfare payments.

The DPJ will also take over the daunting task of reviving the economy which, as figures released on Monday showed, remains extremely fragile.

Japan’s Nikkei 225 stock average initially rose as much as 1.5 per cent to 10,767, its highest level in over 10 months, but the market gave up the early gains and slipped 0.4 per cent to 10,497.19 by midday. The yen strengthened to Y92.93 against the dollar from Y93.60 and climbed to Y132.90 versus the euro from Y133.85.

“The Japanese people have for the first time bravely selected a new government, and I would like to thank them for that,” said Yukio Hatoyama, DPJ president, and Japan’s prime minister presumptive. “We humbly accept their mandate.”

Speaking at his home on Monday, he said: “This is by no means the destination. At long last we are able to move politics, to create a new kind of politics that will fulfil the expectations of the people.”

According to the latest update on state broadcaster NHK’s website, the DPJ had won 308 seats in the lower house compared with the LDP’s 119. Before the poll the LDP had 302 seats to the DPJ’s 112.

“This election is not about a ruling party with an unpopular prime minister in a bad economy, this is about the end of the postwar party system in Japan,” said Gerald Curtis, professor at Columbia University in New York. “It’s the beginning of a different party system.”

While the DPJ fell short of a two-thirds super-majority in the Diet’s lower house, which would have allowed it to enact legislation without the approval of its coalition allies there, its victory was a vindication of its strategy of focusing its campaign on the simple theme of a “change of government”.

The result tore off one corner of the famous “iron triangle” established in the postwar era, which featured a close and co-operative three-way relationship between the LDP, the bureaucracy and Japanese business.

For the LDP, this defeat was far more profound than its only previous fall from power, suffered in 1993 when it lost its lower house majority after senior members including some of the DPJ’s current leadership left the ruling party to create opposition groups.

The anti-LDP coalition government that resulted proved fractious and the LDP returned to power within 11 months. Analysts said Sunday’s result was likely to usher in a new political era featuring two dominant political parties competing for the favour of an impatient electorate wanting the government to revitalise the economy and tackle demographic challenges.

Taro Aso, defeated LDP president and prime minister, said he would step down as party leader after a poll that had “shown people’s disappointment”.

Other people were blunter. In remarks at LDP headquarters, where the mood grew ever more sombre as vote counting progressed, Yoshihide Suga, deputy-chairman of the LDP’s election strategy council, said the defeat suggested “the LDP has passed its use-by date”.

The DPJ’s manifesto promised better welfare and a shift away from support for big business and construction spending. It is unclear how far the incoming party can deliver in the face of budget constraints and bureaucratic resistance.

DPJ calls for a rethink of Japan’s half-century alliance with the US have raised concerns in Washington, but Mr Hatoyama has also stressed the need to win the trust of the US.

In a White House statement, Barack Obama, US president, said he looked forward to “working closely” with Tokyo following the DPJ’s victory in a “historic election”.

“We are confident that the strong US-Japan alliance and the close partnership between our two countries will continue to flourish under the leadership of the next government in Tokyo,” the White House said.

Additional reporting by Michiyo Nakamoto and Reuters

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