TOKYO, Nov 10 - Japanese Prime Minister Junichiro Koizumi's reforms looked in trouble on Monday after voters sliced his coalition's majority in an election, but some analysts said the poll result could be a blessing in disguise for change. Koizumi's three-way camp saw its strength in parliament's 480-seat Lower House shrink to 275 seats from 287 in Sunday's general election, while an energised pro-reform opposition Democratic Party took 177, up from 137, Japanese media said. In a sign that the popular Koizumi's personal magic had faded, his conservative Liberal Democratic Party (LDP) failed to keep the majority it had held on its own, although it looked set to gain more seats after several independents lined up to join. Koizumi seemed certain to remain at the government's helm, but domestic media were quick to predict that his reform agenda of reduced public spending, privatisation and cures for the nation's ailing banks faced rough going. "Election undermines ruling coalition's mandate," said the headline on an editorial in the English-language Daily Yomiuri. The LDP -- a blend of reformists and conservative foot-draggers -- had hoped that Koizumi's personal popularity plus signs of an economic recovery would effect a decisive win. Some investors in Japan's stock market also feared the LDP's limp performance meant reforms would stumble. Tokyo share prices fell by around one percent by early afternoon. "The LDP losing seats is in a way a win for the old guard in the party," said Koji Muneoka, head of domestic sales trading at HSBC in Tokyo. Others begged to differ, arguing that Koizumi's LDP critics would hesitate before attacking him for fear of driving even more voters to the opposition Democrats ahead of an Upper House election in mid-2004. "The LDP was able to hold ground because of Koizumi. Had it been someone different, a proponent of fiscal spending, the party would have lost more seats," said Ikuo Kabashima, a political science professor at the University of Tokyo. Jiro Yamaguchi, a professor at Hokkaido University in northern Japan, agreed that voters wanted change. "Koizumi's leadership may decline within the LDP, but there is a consensus among the people that there must be reforms to break the old systems... There is no going back to the old ways of pork-barrel politics," he said.
GRIM-FACED KOIZUMI
Home Affairs Ministry officials said the final tally had not yet been compiled due to confusion in some constituencies. A godsend for the LDP after its support sank under his wildly unpopular predecessor, the media-savvy Koizumi, 61, sprang to power in 2001 on a wave of grassroots support for his reforms. But the lion-maned leader has had a mixed record when it comes to matching words with action. Pictures of a grim-faced Koizumi splashed across the front pages of Japan's leading newspapers, twinned with a beaming face of Democrats' leader Kan. A weary Kan, 57, conceded before dawn on Monday that the ruling camp had prevailed numerically. He vowed, however, to keep working to take power. "As the biggest opposition party, we will strive to build a responsible party capable of governing," said Kan, his voice hoarse from the 12-day campaign. The Democrats deployed a detailed, pro-reform policy manifesto including pledges to slash public spending and pry policy out of the grip of bureaucrats to try to persuade voters to give the novice party a chance. The election sets Japan on track for a true two-party system after decades of what in effect was one-party rule by the LDP. Small parties on both the left and right were decimated. The exception was the New Komeito, the larger of the LDP's two coalition partners, which increased its seat by three to 34, vital to ensuring the ruling bloc a comfortable majority. Analysts said the clout of the Buddhist-backed centrist party was likely to increase in the coalition, and its emphasis on welfare was expected to affect pressing debate over the creaking national pension system. But the outcome clouds the future for the LDP itself, which has ruled for most of the past half century by catering to core supporters such as farmers, businesses and builders. The LDP has failed to win a majority in the past four elections for the Lower House, although each time it later lured independents to the fold to make up the gap. The turnout was 59.86 percent, a Home Affairs Ministry official said, just above the record low 59.65 percent in 1996.//