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SNAP ANALYSIS - Implications of Japan opposition leader quitting

TOKYO (Reuters) - Japanese opposition leader Ichiro Ozawa told his party on Monday he would resign to try to restore the party’s prospects in a looming election.

Here are some implications of the decision by Ozawa, 66, a former ruling party heavyweight with a dual image as a reformer and a backroom fixer, to step down from his party post over a fundraising scandal that ensnared a close aid.

* Ozawa’s decision will probably improve the opposition Democratic Party’s chances of victory in the general election, since his image as an old-style politician had put off even those voters keen to oust Prime Minister Taro Aso’s long-ruling Liberal Democratic Party (LDP).

Much will depend on whether the party can quickly and smoothly rally around a successor or whether the decade-old group, an amalgam of ex-LDP members, former socialists and younger conservatives, falls into internal bickering.

Ozawa’s role after resigning may also matter, since many experts as well as party members believe his expertise in campaign strategy is needed.

* Financial market experts said Ozawa’s move was unlikely to have any immediate impact, and differed over whether they thought it would improve the Democratic Party’s chances of victory.

A change at the top of the party, however, could lead to some alterations in the Democrats’ economic platform. Former party leader Katsuya Okada, often cited as a frontrunner, has in the past favoured a hike in the three percent sales tax to fund bulging social security costs, a move Ozawa had ruled out for now.

The likelihood of a rejuvenated opposition might also encourage the LDP to come up with extra economic stimulus plans, although a 15 trillion yen (100 billion pounds) spending package is already on its way through parliament.

* A Democratic Party-led administration would not mean a drastic shift in economic policies from the LDP, but the Democrats have pledged to pay more heed to the rights of workers and consumers than big business, while loosening the grip of bureaucrats on policy and reducing waste in public spending.

The Democrats have also promised to adopt a diplomatic stance less reliant on close security ally Washington.

* Some analysts have said a decision by Ozawa to resign could rekindle moves in the LDP to replace the unpopular Aso, whose public support ratings are still only at about 30 percent.

But with Aso thought keen to stay on and no obvious successor in the wings, chances of ousting the premier are unclear.

* Ozawa’s decision looked unlikely to have a direct impact on the timing of the election, which must be held by October.

Speculation has been focussing on an August or early September poll, though some lawmakers say a general election could also be timed to coincide with the July 12 election for the Tokyo Metropolitan assembly.

Editing by Dean Yates