Sweeping victory of DPJ

Japanese general election held yesterday showed a sweeping victory for DPJ and a clear and landslide defeat for LBP.

Several reasons are cited behind it.

First, people seems to be wary of the preliminary result of the structural reform initiated by the pervious Koizumi Government which put privitisation of postal service as the priotized agenda. Income distribution was more in favor of the rich and the economy does not seem to pick up well.

Second, LDP changed its top, which also was a prime minister, three times after the sudden resignation of Koizumi. LDP lost more seats in the upper house election in 2006 under Shinzo Abe, and the trend was intensified afterwards and seems to rise furher this time at the lower house election. In pervious decades, LDP was able to restructure the leadership with the fierce competetion of the 5 to 6 factions within the part, but it did not work that way this time. Factions worked only as the group who represent interest and that did erase out the hope for further reform and deregulation.

DPJ is composed of several different groups and there is much differences of opinions among the members, some very close to Socialist-Democratic Party and other close to LDP. It is possible that such diversities might bring about disagreements on the selection of policy issues.

Market would initially welcome the victory of DPJ but it would depend on if DPJ could present clear policies towards reliable designs of the Japanese economy and society in the future and that should include issues of deregulation, which was not included in the political manifest of both DPJ and LDP. If not, voters would regard the new LDP government as almost similiar to the new DPJ government and could blow serious hit in the upcoming election of upper house next year.