Fresh from his party's biggest electoral success in almost a decade, the Japanese Prime Minister, Mr Junichiro Koizumi, yesterday gave more details of the painful reforms he says are needed to pull the world's second-largest economy out of its decline.
But with details still vague, the battered Nikkei Index remained unconvinced and greeted the results of the upper-house election with a 16-year low. The benchmark Nikkei average ended down 218.81 points at 11,579.27, its lowest since January 7th, 1985.
The stock slump was an ominous sign for a leader who has staked his political reputation on tackling the country's financial problems and who needs the support of investors to do so.
Final results showed the country's three-way coalition dominated by the Liberal Democratic Party (LDP) romped home in the ballot with 78 seats, boosting its majority in the 247seat chamber.
The results were a particular triumph for the LDP, which increased its tally by three and managed to stem a long period of electoral decline with its best result since the 1992 House of Councillors election. The Prime Minister said the outcome was "better than expected."
Although the main opposition Democratic Party of Japan also took an extra three seats, to make a final 26, other left-of-centre parties expressed frustration at what they felt was a campaign about personality rather than issues.
A spokesman for the Social Democrats, which managed just three seats in its worst slump ever, said that fighting the hugely popular and charismatic Mr Koizumi was "very difficult". All the opposition parties criticised Mr Koizumi for his failure to discuss the specifics of his reform plans during the campaign.
Announcing a three-stage reform programme yesterday the Prime Minister said his cabinet would reveal the first schedule probably next month before an extraordinary session of the Diet (parliament).
Many economists have warned that the plans to cut public spending and force debt laden banks to clean up bad loans just as most of the country's key economic indicators point downwards will deepen the slump and lead to massive job losses.
