Japan's LDP leads as candidates make last appeals for votes

TOKYO Sat Dec 15, 2012 7:13am EST

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TOKYO Dec 15 (Reuters) - Japanese candidates made final appeals on Saturday ahead of an election expected to restore the conservative Liberal Democratic Party (LDP) to power and give hawkish former premier Shinzo Abe a second shot at running the world's third biggest economy.

An LDP win on Sunday would usher in a government committed to a firm stance in a territorial row with China, a pro-nuclear energy policy despite last year's Fukushima disaster and a radical prescription for hyper-easy monetary policy and big fiscal spending to beat deflation and tame a strong yen.

Media surveys suggest the LDP will win a big majority in parliament's powerful 480-seat lower house, just three years after a crushing defeat that ended more than 50 years of almost non-stop rule by the business-friendly party, although many people were undecided in surveys just days before the vote.

Together with a small ally, Abe's LDP could even gain the two-thirds majority needed to break through a policy deadlock that has plagued successive governments for half a decade.

"It really looks more like an avalanche than a landslide," said Gerry Curtis, a professor at New York's Columbia University and a veteran Japan expert.

Abe, 58, who resigned as premier in 2007 after a troubled year in office, has been talking tough on a row with China over tiny islands in the East China Sea, although some experts hold out hope he will temper his hard line with pragmatism.

The soft spoken grandson of a prime minister, who looks set to become Japan's seventh premier in six years, also wants to loosen the limits of a 1947 pacifist constitution on the military, so Japan can play a bigger global security role.

"We will firmly restore the U.S.-Japan alliance and regain our diplomatic power," Abe said in his final pitch to a crowd, many waving Japan's national flag, in Tokyo's Akihabara district, a high-tech centre.

"And together with you all, we'll protect our beautiful seas and territory, no matter what," he said to applause and cheers.

The LDP, which promoted atomic energy during its decades-long reign, is expected to be friendlier to utilities seeking to restart nuclear reactors taken off-line after the Fukushima disaster, triggered by an earthquake and tsunami on March 11 last year.

Abe has called for "unlimited" monetary easing and big spending on public works - long the centrepiece of the LDP's policies and criticised by many as wasteful pork-barrel - to rescue the economy from its fourth recession since 2000.

"ABENOMICS"

Many economists say that prescription - dubbed "Abenomics" by media - could create temporary growth and enable the government to go ahead with a planned initial sales tax rise in 2014 to help curb a public debt now twice the size of gross domestic product.

But it looks unlikely to cure deeper ills and risks triggering a market backlash if investors decide Japan has lost control of its finances.

"We must move forward. We cannot go back to the 'lost 20 years'," Prime Minister Yoshihiko Noda told a crowd in Tokyo.

Japan's economy has been stuck in the doldrums for decades, its population ageing fast and big corporate brands such as Sony faltering, making "Japan Inc" a synonym for decline.

Noda's Democratic Party of Japan (DPJ) swept to power in 2009 promising to pay more heed to the interests of consumers than companies and break bureaucrats' hold on policymaking.

Many voters feel the DPJ pledges were honoured mostly in the breach as the novice party struggled to govern and then to cope with last year's earthquake, tsunami and nuclear disaster.

Voter distaste for both major parties has spawned a clutch of new parties including the right-leaning Japan Restoration Party, founded by popular Osaka Mayor Toru Hashimoto and led by octogenarian nationalist Shintaro Ishihara.

Surveys show the ruling DPJ is likely end up with fewer than 100 seats, less than a third of its showing three years ago.

Bedevilled by policy dissent, the DPJ saw a stream of defections after Noda pushed through the sales tax increase with help of the LDP and New Komeito. Noda is the party's third prime minister in three years, a turnover equalling that of the LDP after a rare five-year term by Junichiro Koizumi ended in 2006.

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