Japan's Koizumi wins LDP poll, set for PM

Koizumi wins stunning victory in LDP leadership election

By staff and wire reports

TOKYO, Japan -- Self-styled reformer Junichiro Koizumi has won a stunning victory in an election for the presidency of Japan's main governing party.

Koizumi defeated former Prime Minister Ryutaro Hashimoto in the two-tiered vote, which included 141 ballots divided up among the party's local chapters and 346 cast Tuesday by its members of parliament.

AUDIO CNN's Marina Kamimura discusses the change in leadership of Japan's Liberal Democratic Party 1.14Mb/1:41 min. AIFF or WAV sound

The win, which began with a sweep of nationwide primaries that began last week, will pave the way for his confirmation as the nation's 11th prime minister in 13 years.

Koizumi won 298 votes, to 155 for Hashimoto. A third candidate, Economy Minister Taro Aso, had 31. Koizumi needed a simple majority of 244 votes to be elected.

Koizumi's "Change the LDP, Change Japan" platform won resounding support from local party members deeply afraid of losing an election for parliament's Upper House in July, but left many analysts unsure how it would play out in concrete policies.

Lack of clarity

Richard Jerram, an economist at ING Barings, has said Koizumi's monetary policies lack clarity, making it impossible to predict how his success will affect Japan's ailing economy.

Koizumi (R) won support from local party members

"His economic policy has been vague, contradictory and frequently changing, but the market’s taking the view that anything is better than what we’ve had so far," he said.

"He’s seen as the only person who offers anything radically different and therefore it’s probably a good thing... but so far it’s impossible to say what all this means because we don’t know exactly what he’s going to do."

Business interests welcomed Japan's new leader with optimism. But all eyes are now on how far Koizumi will be able to push reforms.

"He is at heart a radical reformer, and I don't have many doubts about that," said Garry Evans, Japan equity strategist with HSBC. "The question is whether he sticks to his principals and … whether he's able to push through what he wants to push through."

Koizumi defeated two other candidates including the establishment favourite, former Prime Minister Ryutaro Hashimoto, who was once seen as a sure bet by virtue of the backing of the LDP's biggest faction.

Needs full support

Koizumi is almost certain to be voted in as prime minister on Thursday by parliament, where the LDP-led ruling coalition holds a majority in the key Lower House.

His success as leader will depend on how much support he receives in the LDP, Jerram says.

"The number of votes he got suggests that followers of (contender and conservative LDP policy chief Shizuka) Kamei voted for him.

"This is going to be the next key thing to watch for. If Kamei gets a serious position in the new set-up you’re already going down the path of pragmatism leading to re-written promises.

"It would be very, very negative for the market if Koizumi gives Kamei a serious post, because Kamei has been almost the antithesis of Koizumi," Jerram said.

The Associated Press & Reuters contributed to this report.

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