Japan by-election holds clues to PM Fukuda's fate

IWAKUNI, Japan (Reuters) - Voter Kunio Fukuda wants straight answers for tough questions from candidates battling in a heated by-election in southwestern Japan, the outcome of which will likely affect the prime minister's fate far away in Tokyo.

"There is a lot of anxiety about the future -- pensions, jobs -- and we want politicians to show us their vision for how to cope with these issues," said Fukuda, 59, as he waited for the ruling party candidate to give a speech in Iwakuni City, some 1,000 km (600 miles) from the capital.

The race between Shigetaro Yamamoto, backed by the ruling Liberal Democratic Party (LDP), and the Democratic Party's Hideo Hiraoka, to fill a lower house seat is being watched for clues to whether Prime Minister Yasuo Fukuda, 71, can hold onto his job.

The Japanese leader's support rates have sunk below 30 percent in some surveys due to his inability to get policies through a divided parliament, where the Democrats and smaller allies control the upper house and can delay laws.

"If the LDP loses, Fukuda is at risk," Yukihisa Fujita, a Democratic Party upper house lawmaker who was in Iwakuni stumping for Hiraoka, told Reuters at Hiraoka's headquarters.

"Moves (in the LDP) to replace him will speed up because it will be clear he can't win elections," Fujita said, echoing the view of political analysts back in Tokyo.

In a sign of Fukuda's sagging popularity, Yamamoto's campaign office manager initially said the prime minister had not been asked to visit the mountainous district, a mix of industry, farming and commerce that is home to a U.S. Marine base and where many residents feel left behind by Japan's urban-led growth.

On Tuesday, though, a Yamamoto supporter announced to a 3,500-strong crowd that Fukuda would campaign locally next week, apparently at the request of party lawmakers.

Reflecting the high stakes in Tokyo, ruling party heavyweights such as former foreign minister Taro Aso, tipped as a likely successor to Fukuda, and celebrity lawmakers, including a former Olympic skier and a female pro-wrestler, are stumping for Yamamoto, a former bureaucrat with little name recognition.

OZAWA AT RISK

The results of the April 27 vote could also have serious implications for Democratic Party leader Ichiro Ozawa, 65, who has made no secret of his desire to force an early general election in hopes of breaking the LDP's six-decade grip on power.

No lower house election need be held until September 2009, but some pundits say the prime minister could have to call one sooner to seek a mandate to break the political gridlock.

"If Hiraoka loses, discontent with Ozawa's leadership will increase," Fujita said, noting some in the party were already unhappy over Ozawa's willingness to discuss a "grand coalition" with Fukuda last year and with what they see as his autocratic style. His party rejected the idea of a coalition.

Power struggles back in Tokyo aside, for some Iwakuni voters, the issues are pretty simple.

"The new mayor just won an election with LDP support and this time I'd like the LDP to win again, because it will be easier to improve the city with subsidies and such," said Seiko Nukui, a 43-year-old mother of twins eating burgers and fries.

Yamamoto is clearly trying to appeal to such concerns.

"We can't destroy the countryside ... or there will be no future for our children or our grandchildren," the slender former bureaucrat told voters from atop a van near a shopping arcade on the eve of the campaign's official start on Tuesday.

Nukui said she was little swayed by Democrat opposition to a controversial 25 yen (25 cent) per liter gasoline tax that expired on March 31 after the upper house put off a vote.

The Democrats argue the tax, earmarked for road construction, is a symbol of the LDP's wasteful spending on vested interests.

"I want to put an end to old-style politics and realize politics that puts the people's livelihood first," Hiraoka told a crowd of mostly elderly supporters, as red and white banners with his slogan "Change Japan" fluttered in a warm, sunny breeze.

The ruling bloc wants to revive the tax sometime after April 29 to avoid a 2.6 trillion yen shortfall in national and local budgets, but to do so must take the rare step of using its two-thirds lower house majority to override the upper chamber.

"As a housewife, I like cheaper gasoline but strains will be felt elsewhere if public works projects stop," Nukui said, as her 9-year-old daughters munched french fries.

Not everyone agrees. "Cheaper gas is better," said 34-year-old mother Tomoe Nakahara after listening to Hiraoka.

"We need roads, but there is too much waste."

Hiraoka, a former finance ministry official and three-term lawmaker, is also stressing the need to ensure retirees aren't short-changed on pensions, a hot-button issue after officials confessed last year to mishandling millions of premium records.

Hiraoka's backers hope such appeals will resonate with voters enough to overcome the LDP's traditional grip on the district and its formidable, if slightly rusty, political machine.

Others, however, find themselves longing for a change.

"I used to be an LDP supporter, but they don't look at things from the people's perspective," said retired civil servant Satoru Hirota, 74. "What we need is a real two-party system and a change of government."

But for some voters, tradition looks likely to carry the day.

"I've been for the LDP ever since I was born," said one 80-year-old grandmother waiting for a bus. "I think they can do more for the region, though maybe there's not so much difference.

($1 = 101.37 Yen)