JAPAN:JAPAN'S RULING coalition will dissolve parliament in two weeks and call a general election for October 26th, say local press reports, ending weeks of political uncertainty that has left Asia's largest economy rudderless amid growing financial turmoil, writes David McNeillin Tokyo
Citing sources inside the government, the Asahi newspaper says the Liberal Democrats (LDP) and junior partner New Komeito will begin campaigning after the election of a new prime minister this month, officially dissolving the lower house on October 3rd.
The prime minister, Yasuo Fukuda, threw the government into chaos on September 1st when he announced his resignation after less than a year in office. The LDP will elect his successor on Monday, with all dials pointing to victory for Taro Aso, the government's controversial number two.
Mr Aso will almost certainly become the new prime minister because his party dominates the more powerful lower house which has final say on who leads the country. The LDP is hoping that an expected boost in the opinion polls following his selection will bounce them back into office.
An LDP spokesman denied last night that the election date had been set, saying it was "a decision for the new leader". But after the resignation of two hand-picked prime ministers in two years, the party is under pressure to allow voters have a quick say in who takes the helm.
Mr Fukuda and his predecessor, Shinzo Abe, both came to power after party elections and were not put before the people, a process the main opposition Democrats (DPJ) call "undemocratic".
"The government has no mandate to lead the country," said the DPJ's Yukio Hatoyama last week.
The government is not obliged to call the lower house election for another year, but the decision to move quickly has also been prompted by the global financial chaos which is lapping at Japan's shores. Analysts estimate that Japanese banks and other financial institutions have about $1.67 billion (€1.16bn) in outstanding loans to collapsed US securities house Lehman Brothers, probably the tip of a large iceberg.
Last September's loss of the upper chamber to the Democrats paralysed Mr Fukuda's agenda and caused the suspension of several key bills, including a supplementary budget between both houses. "The economy will deteriorate sooner or later, so the earlier [a snap election], the better," LDP chief cabinet secretary Nobutaka Machimura told the Asahi.
If confirmed, the October election is likely to be the most closely fought in years, between the conservative LDP, in office for all but 10 months since 1955, and the DPJ, who smell power after last year's historic win. The Democrats are scrambling to shore up their parliamentary strength ahead of the contest by negotiating a possible merger with the small People's New Party.
The contest will likely pit the outspoken Mr Aso against DPJ president Ichiro Ozawa, another old political warhorse who has flitted on the edges of power for years. Mr Ozawa bolted from the LDP in 1993 and joined the Democrats in 2003. Last year he said his goal in life was the defeat of the LDP.