Party Vote Sets Up Japanese Premier to Win Second Term

Prime Minister Junichiro Koizumi easily won reelection Saturday as head of Japan’s ruling Liberal Democratic Party and is likely to parlay that victory into a second term at the helm of the world’s second-largest economy.

Saturday’s vote opens the way for the 61-year-old leader to dissolve the lower house of parliament and call elections as early as November. If the LDP retains its majority against a new alliance of opposition parties, as many leading analysts predict, Koziumi will gain a new term as prime minister.

Koizumi trounced his three opponents within the LDP, the party that has dominated Japanese politics since the end of World War II. Koizumi won 61% of the votes cast Saturday by 657 party leaders.

Koizumi’s popular appeal remains his strong point. His approval ratings are not at the sky-high levels reached 2 1/2 years ago when he came to office as a maverick promising to end Japan’s decade-long economic slump. But the ratings have surged in recent weeks amid signs that the economy is improving.

“This election was a test for the LDP to gain public trust,” Koizumi said Saturday. “This was an election to prove this party is the party of the people, and of promoting reforms.”

Many economists contend that Koizumi’s economic reforms are vital if Japan is to revive an economy that was once the envy of the world. He has promised to continue cutting wasteful government spending, privatizing state companies and forcing banks to clean up portfolios saddled with bad loans.

However, Koizumi’s critics say he has too often stalled his program in the face of domestic opposition, notably with the banking system. They insist that the signs of recovery, including a rising stock market, have more to do with stronger demand for Japanese exports in the U.S. and China.

Supporters and opponents alike are waiting to see whether the prime minister will stack his Cabinet with like-minded reformists in a reshuffle expected Monday.

He reportedly plans to keep his top spokesman, Chief Cabinet Secretary Yasuo Fukuda, and his economic policy minister, Heizo Takenaka, whose crackdown on banks has been criticized by lawmakers but lauded by foreign investors.