Japan Ruling Party Wins Decisively : Politics: Liberal Democrats overcome political scandal to win a majority of seats in the lower house. But the Socialists make gains.

TIMES STAFF WRITER

Recovering from a humiliating defeat only last July, Japan's ruling Liberal Democratic Party overcame a record surge by the Socialists to win a decisive victory in a crucial House of Representatives election, final returns showed today.

Liberal Democrats and other "unaffiliated" conservatives expected to join or vote with the governing party had won 289 seats, a majority of 33 in the 512-seat lower house, the chamber that chooses the prime minister.

A large turnout of 73.3% of the nation's 90.6 million eligible voters cast ballots in clear, unseasonably warm weather Sunday.

After just four hours of tabulations, NHK, the quasi-governmental national radio and TV network, declared that Prime Minister Toshiki Kaifu's party was assured of winning a majority.

The No. 1 opposition party, the Socialists, who advocate unarmed neutrality, added a record 55 seats to bolster their position in the lower chamber to 141 seats, including "unaffiliated" winners expected to vote with them. Their biggest previous gain--27 seats--came in 1972.

Not since 1967 have the Socialists won as many as 141 seats in the lower house. Four years ago, they won only 86, a historic low.

But losses among three other opposition parties enabled Kaifu's party to extend its 35-year control of the lower house.

The results were surprising, coming as they did on the trail of political problems that had resulted in the unprecedented loss of the LDP's majority in the upper house of Parliament in elections last July. These problems included a taxation controversy, accusations that many ruling party stalwarts were guilty of playing "money politics" and widespread dissatisfaction within Japan's important farming sector.

Even without such problems, the Liberal Democrats could not have realistically expected a victory larger than the one they achieved, in the view of veteran observers. Japanese voters traditionally have swayed away from the Liberal Democrats after each major lower house victory scored by the ruling party.

In the last lower house election in 1986, the Liberal Democrats wound up with 310 seats after embracing other conservative winners.

The victory bolstered the fragile position of Kaifu, who was plucked from obscurity last August after an influence-buying scandal smeared all mainstream party leaders. He promised to use Sunday's victory to carry out political reform.

Despite her party's gains, Takako Doi, the Socialists' charismatic chairwoman, said that the failure to unseat the Liberal Democrats was "very unfortunate."

Ichiro Ozawa, the Liberal Democrats' secretary general, said opposition parties had failed to come up with any clear policy for a Socialist-led coalition. Voters, he added, decided they could not turn the government over to such an uncertain future.

Voters supported Liberal Democrats' "policy formed with eyes on the ground," Kaifu said. "Reverse winds" blowing against the party have changed considerably, he added.

The turnaround in Liberal Democratic fortunes, however, did nothing to clear up the foggy political situation created by the party's loss last July of its majority in the House of Councilors.

Ozawa declared that the party would use its majority in the lower house to reelect Kaifu as prime minister without attempting to form a coalition. But he also stressed the need for the governing party to discuss parliamentary deals with opposition parties in light of the conservatives' minority position in the House of Councilors.

All legislation, except for the budget and international treaties, must be approved by the upper house as well as by the House of Representatives.

Masashi Yamakawa, director of Nikko Securities' Osaka stock division, said the election result "cleared a big hurdle" but added that stockbrokers "can't welcome the news with open hands" Because of expectations that the Central Bank would carry out its fourth increase since last May 31 in the central discount rate it charges for loans to commercial institutions. The rate is now 4.25%.

The yen finished morning trading at 144.45 to the dollar on the Tokyo Foreign Exchange Market, up 0.10 from Friday's close. Because of a fear of higher interest rates, stocks, however, fell 217.90 points to 37,242.42 in morning trading.

At the beginning of the campaign, pollsters had predicted that the Liberal Democrats would win only a narrow victory. But voters--as they did in 1980, when the perennial ruling party also faced the threat of defeat going into a lower house election--returned to the fold, apparently out of fear of a Socialist-led coalition.

The Liberal Democratic Party and the conservative forces that preceded it in office have governed Japan without interruption since 1948.

Farmers, whose revolt against the conservatives' moves to open markets to agricultural imports devastated the ruling party last July, displayed only a small measure of discontent this time.

In the rice-rich Tohoku (Northeast) area and on the mikan (mandarin orange) island of Shikoku, conservatives lost 11 of the 56 seats they won four years ago. The showing, however, was a sharp gain from last July, when Liberal Democratic candidates were wiped out in both agricultural regions.

The anger of women voters, who rebelled last year against a controversial 3% consumption tax implemented by the Liberal Democrats, appeared to play a smaller role in the results than was the case in July. Although 74.6% of women voters--2.7% more than the male turnout--cast ballots, 12 out of 66 women candidates--five more than in 1986--were elected.

Last July, 22 women won seats in the upper chamber, the highest ever.

Except for one newcomer, all candidates tainted in the Recruit Co. influence-buying scandal that forced former Prime Minister Noboru Takeshita to resign last June won reelection.

Takeshita, who received nearly $1.5 million in contributions and profits from Recruit Co. stocks, was reelected handily, while former Prime Minister Yasuhiro Nakasone, who received nearly $800,000, survived the most severe challenge he has had in 17 elections dating back to 1947. He finished third among four winners in his Gumma prefecture (state) district.

"I do not know the words with which to thank you," he told supporters after his victory was confirmed Sunday night.

Opposition forces made a special attempt to unseat Nakasone, who violated no laws despite the money he received from Recruit Co., an information and real estate conglomerate. But voters of Gumma prefecture returned three of the four candidates they have elected every year since 196. The one exception: Yasuo Fukuda, 53, replaced his father, former Prime Minister Takeo Fukuda, 85, who retired.

Former Prime Minister Sosuke Uno, who resigned when he was smeared by a sex scandal in the aftermath of July's debacle, also was reelected.

The Socialists' Doi claimed that voters' desire to abolish the 10-month-old 3% consumption tax led to a spurt in support for her party. She reiterated her determination to abolish the tax when a special session of Parliament opens later this month to choose the prime minister and debate a fiscal 1989 supplementary budget as well as the budget for fiscal 1990.

Election ANALYSIS: Electorate opted for continuity over change. A11

NEXT STEP

Japan's new House of Representatives, still dominated by Liberal Democrats, is likely to reseat Prime Minister Toshiki Kaifu when it convenes next Monday or Tuesday. Later next week, Japan will resume talks with the United States to relieve trade tensions. The talks had been put off until after the election.

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