Japan poll victory leaves Shinzo Abe walking a tightrope

Shinzo Abe, whose Liberal Democratic Party (LDP) stormed to victory in yesterday's election, will inherit a country in recession, still reeling from last year's earthquake and nuclear crisis.

With upper house elections seven months away, Abe must convince a disillusioned electorate that his plans for more monetary easing and fiscal stimulus will work or he may face a similar fate as his predecessors.

"Abe's popularity will disappear very quickly if he does something wishy-washy or over-reacts and leads Japan into a real crisis with China," said Aiji Tanaka, a political science professor at Waseda University in Tokyo.

"If he is calm and handles the situation well, he can keep up the momentum until July. The Democratic party of Japan (DPJ) is now a medium-sized party.

"They performed very badly and disappointed almost everyone in Japan."

On the economy - the single biggest issue of the campaign - Abe has pledged to return to high spending on public works and ease monetary policy to boost growth. The Japanese economy has been beset by stagnation and deflation for two decades and recently entered its fourth recession since 2000.

The LDP, which governed for all but 11 months between 1955 and 2009, has capitalised on popular anger over Prime Minister Yoshihiko Noda's failure to deliver on a promise to replace pork-barrel politics with a focus on families, welfare and healthcare.

Many voters feel the DPJ has dithered over the reconstruction of the region devastated by last year's earthquake and tsunami.

And they associate Noda with an unpopular plan to double the sales tax to 10%, a measure that was passed only with the support of Abe's party.

But there was little enthusiasm outside polling stations for the LDP and Abe. Instead, uncertainty over the economy and Japan's response to the rise of China appears to have sent voters reaching for the familiar - big spending on public works to boost growth, and close security ties with the US to counter the perceived threat from China.

"The Democrats are out because they have been unable to implement their manifesto and are divided. But that doesn't mean I support the LDP," said Yosuke Matsumoto, 33. "Nothing will change under them."

Koichi Nakano, a political science professor at Sophia University, said the election was about punishing the DPJ, which won by a landslide in 2009.

"It seems to me that people are driven by nostalgia, as they seem to want to bring the LDP back to power because they lack better alternatives," he said.

The LDP victory marks a personal comeback for Abe, who quit as premier in 2007 after a year in office, citing a stomach ailment. He advocates "unlimited easing" by the Bank of Japan to cope with more than a decade of deflation and increased public works spending.

Abe said yesterday he would decide on the timing of the increase in the five per cent sales tax after looking at next year's second-quarter data. The tax is set to go to eight per cent in April 2014 and 10 per cent in October 2015.

"In all likelihood, the bloom will be off the rose by next summer's upper house election," said Gregory Noble, a professor of politics at the University of Tokyo. "The underlying fact is that the economy is terrible and is not likely to get better soon, and as a result voters are unhappy."

During his previous tenure as prime minister, Abe pursued a nationalistic agenda pressing for more patriotic education and upgrading the defence agency to ministry status. The LDP wants to revise Japan's pacifist constitution to strengthen its Self-Defence Forces and, breaching a post-war taboo, designate them as a "military."

It's not clear, however, how strongly the LDP will push such proposals, which have been kicked around by conservatives for decades but usually make no headway in parliament because they are supported only by a fairly small group of right-wing advocates.

Bloomberg, The Guardian, Associated Press