Koizumi seeks reforms push

Junichiro Koizumi, Japan’s prime minister, on Monday sought to press home his advantage after a massive election victory on Sunday, saying he wanted to push postal privatisation through parliament within two weeks.

Party officials said the Liberal Democratic party, which now has a two-thirds majority in the lower house, might take the unusual step of submitting the bills to the upper house first to save time. Its strength in the lower house means it can pass the bills even if the upper chamber rejects them.

Mr Koizumi called a snap poll last month after the upper house voted down his bills, turning the election into what he said was a referendum on privatisation of the post office, the world’s biggest bank.

The LDP increased its number of seats from 212 to 296, the second-highest figure in its 50-year history, with the opposition Democratic Party of Japan losing 64 seats to 113, ending any hope of gaining power for the foreseeable future.

The LDP said it would continue its coalition with the Buddhist-backed Komeito party, which brings another 30 seats.

Voter turnout, up 7.65 percentage points at 67.5 per cent, was the highest since 1990, reflecting the excitement generated by Mr Koizumi’s aggressive campaign.

Markets reacted enthusiastically to the landslide, which is seen as affirming Japan’s commitment to loosely defined reform. The Nikkei 225 closed up 1.6 per cent at 12,896.43. The Japanese currency climbed sharply to a one-week high against the dollar before drifting back to Y109.8.

Economists said the conviction that Japan had chosen a decisive path might persuade consumers to open their wallets. Consumer demand is already a factor in respectable growth. Revised figures released on Monday showed the economy grew three times faster than originally thought in the second quarter, at an annualised 3.3 per cent.

The demoralised DPJ said it would move quickly to elect a new leader to replace Katsuya Okada, the former bureaucrat who quit after his party’s crushing defeat. An election will take place on Saturday.

Potential leaders include two former DPJ presidents, Naoto Kan and Yukio Hatoyama, as well as Ichiro Ozawa, a powerful former LDP kingmaker considered one of Japan’s most brilliant and machiavellian politicians.

Mr Koizumi adamantly repeated his intention not to stay as prime minister beyond his tenure as LDP party chief, which runs until next September. The LDP hierarchy is expected to press him to stay on until upper house elections in 2007 in the hope that he can reproduce his electoral magic.

Mr Koizumi said: “People expressed their judgment on the premise that my tenure as LDP president ends in September next year.”

Even so, some commentators expressed concern at what they saw as the end of balanced power in Japan, and the emergence of an autocratic leader who brooked no dissent.

Nobuyuki Nakahara, a former central bank board member, said the simplistic repetition of Mr Koizumi’s message reminded him of pre-war Japanese militarism. “All roads lead to postal reform and postal reform leads to all reforms. It’s ridiculous,” he said.

Mr Koizumi said there could be a minor delay to postal privatisation, which was meant to unfold over 10 years from April 2007. The prime minister says privatisation fits his prescription for a smaller government and a greater role for the private sector.

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