Japan election nearer, but policy clarity elusive

By Linda Sieg - Analysis

TOKYO (Reuters) - The sudden resignation of Japan's unpopular prime minister has boosted prospects for an election showdown by the end of the year, but expectations are slim that policy clarity will emerge soon.

Some optimists hope the resignation of Yasuo Fukuda, the second Japanese leader to throw in the towel in less than a year, is a step on a long path toward a realignment of parties along clear policy lines. Most, however, are resigned to more muddle.

The confusion comes as Japan confronts not only an immediate economic downturn, but deep-seated longer-term problems stemming largely from its fast-ageing, shrinking population.

"The most important point is that whatever happens over the next few months -- and there will probably be an election by the end of the year -- Japan is not going to come out of this with strong, decisive, forward-looking leadership," said Gerry Curtis, a Japan expert at Columbia University in New York.

"Problems will continue for some time to come."

Fukuda, 72, abruptly announced his decision to step down on Monday, making him the second Japanese prime minister to abandon his post in less than a year, prolonging a political vacuum just as Japan's economy teeters on the edge of recession.

Japan has had 10 prime ministers in the 15 years since the long-ruling, conservative Liberal Democratic Party briefly lost power in 1993. On Tuesday, it was scrambling to find another.

Most pundits were putting their bets on the party's No.2, Taro Aso, an outspoken former foreign minister with a fondness for manga comics, though some noted he was similarly out in front last year, only to lose at the last moment to Fukuda.

Fukuda, whose ratings had slumped due to doubts about his leadership in the face of a divided parliament, had become an unwelcome burden as lawmakers in the powerful lower house gear up for an election that must be held by September 2009.

The ruling bloc is now expected to push for an early snap election within the year if the new premier gets a hoped-for bounce in public opinion polls, setting up a battle between the LDP-led coalition and the main opposition Democratic Party.

But with both main parties composed of lawmakers who run the gamut from hawks to doves on diplomacy and pork-barrel spenders to small-government reformers on the economic front, clear policies are unlikely to result whatever the voters decide.

SLOW DEMISE

Economic policy makers are grappling with whether to focus on reining in Japan's huge public debt and leaving more to the markets or spend more, ballooning social welfare costs.

Japan has also yet to resolve whether it wants to break the constraints of its pacifist constitution to play a bigger role in global security, or stay closer to home and stress warmer ties with Asian neighbors such as China.

"We're guaranteed not to have clarity on policy," said Steven Reed, a political science professor at Chuo University.