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September 1, 2009

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Tough task lies ahead for Japan's new rulers

JAPAN'S likely next prime minister rushed to select Cabinet ministers yesterday after his party trounced the ruling conservatives in elections and inherited a mountain of problems, including how to revive the world's second-largest economy.

Yukio Hatoyama spoke only briefly with reporters before huddling with party leaders. In a victory speech late Sunday, he said he would focus on a quick and smooth transition and make a priority of choosing Japan's next finance minister.

He has also said he wants to redefine Tokyo's relationship with the United States.

Prime Minister Taro Aso, conceding defeat, said he would step down as president of the ruling Liberal Democratic Party.

Aso to step down

"As head of the party, I feel strong responsibility and it is my intention to resign," Aso told a news conference yesterday. His successor as party leader is expected to be named in late September.

Although the nation gave the Democratic Party of Japan a landslide win, most voters were seen as venting dissatisfaction with the LDP and the status quo.

The LDP - teaming up with big business, conservative interests and the powerful national bureaucracy - governed Japan for virtually all of the past 54 years.

Its election loss has been attributed primarily to frustration with the economy, which is in its worst slump since World War II.

Official results were still being counted, but exit polls by all major media said Hatoyama's party had won more than 300 of the 480 seats in the lower house of parliament. That would easily be enough to ensure that he is installed as prime minister in a special session of parliament that is expected in mid-September.

The Democrats controlled the less powerful upper house of parliament with two smaller allies since 2007, but if they fail to quickly deliver on their promises, the LDP could rebound in elections for that house next year.

The task ahead for the Democrats is daunting.

Japan managed to climb out of a year-long recession in the second quarter, but its economy remains weak. Unemployment and anxiety over falling wages threaten to undermine any recovery. The jobless rate has risen to a record 5.7 percent.

After a rapid succession of three administrations in three years, Japan is facing its worst crisis of confidence in decades.

The Democrats' solution is to move Japan away from a corporate-centric economic model to one that focuses on helping people.

They have proposed an expensive array of initiatives: cash handouts to families and farmers, toll-free highways, a higher minimum wage and tax cuts.


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