SNAP ANALYSIS: Change likely as Japan PM calls poll

By Linda Sieg

TOKYO (Reuters) - Prime Minister Taro Aso is expected to call an election for parliament's lower house on August 30 despite forecasts that his long-ruling Liberal Democratic Party (LDP) and its junior partner are set to lose.

The following are some implications of the general election for parliament's powerful lower house, which is likely to lead to an historic change in government.

* The opposition Democratic Party is ahead in opinion polls and analysts say a big win in a Tokyo assembly election on Sunday presaged a similar victory in the poll for parliament's powerful lower house.

* A Democratic Party victory in the national parliament's lower house would end half a century of nearly unbroken rule by the business-friendly LDP and raise the chance of resolving political deadlock as Japan tries to recover from its worst recession since World War Two.

* The Democrats have pledged to pay more heed to the rights of consumers and workers than those of corporations and to pry policy-making decisions out of the hands of bureaucrats as a way of reducing and prioritizing wasteful spending.

* A Democratic Party government would not likely signal an immediate drastic shift in macro-economic policies since, like the LDP, the party is putting a priority on reviving the recession-hit economy rather than repairing tattered state finances.

* Some analysts say the Democrats' large spending plans could inflate public debt and push up government bond yields.

* Some stock market analysts say the impact of a Democratic Party win in a national election would be hard to gauge until their policies were hammered out in greater detail. Others think a change from the LDP would be positive for share prices as it might bring reforms.

* The Democrats would almost certainly opt to form a coalition government with two smaller allies, one left-leaning and one conservative, even if they win a majority on their own in the lower house, because they need that co-operation in the upper chamber. That could hamper smooth policy formation.

* The Democratic Party had pledged to adopt a foreign and security policy less subservient to close ally the United States, so some analysts worry the U.S.-Japan alliance may suffer. Other recent reports say the party is toning down some policies likely to worry Washington.