RPT-FACTBOX-Japan ruling party’s possible coalition partners

(Repeats with no changes to text)

(For more stories on Japanese politics click [ID:nPOLJP])
July 11 (BestGrowthStock) – Japanese Prime Minister Naoto Kan’s ruling
coalition was set to lose its majority in parliament’s upper
house after an election on Sunday, threatening efforts to curb
massive public debt and putting his job at risk.

Kan’s ruling Democratic Party of Japan (DPJ) will almost
certainly stay in power by virtue of its majority in
parliament’s powerful lower house but will need to seek new
partners to control the upper chamber and pass bills smoothly.

A new coalition risks complicating policymaking as Japan
struggles to engineer growth and rein in public debt nearly
twice the size of GDP.

Below are possible coalition partners and their policies
(Japanese names in parentheses):


The PNP, the DPJ’s current partner, wants to stay in the
ruling coalition. Headed by outspoken former banking minister
Shizuka Kamei, the party wants stimulus spending of 100
trillion yen ($1 trillion) over the next three years.

It has said the 5 percent sales tax should not be raised
before an economic recovery.

The conservative party began as a group of Liberal
Democratic Party lawmakers who opposed former Prime Minister
Junichiro Koizumi’s plan to privatise the postal system. The
Democrats have promised to pass a shelved bill to scale back
postal privatisation in the next session of parliament.


Your Party has ruled out a coalition with the DPJ but has
said it could cooperate with the DPJ on policies such as
getting the Bank of Japan (BOJ) to do more to overcome

The party has suggested the BOJ share a price stability
target with the government and that the BOJ support funding for
small and medium-sized companies.

The party, headed by another former banking minister,
Yoshimi Watanabe, who left the then-ruling Liberal Democrats
last year, has promised not to raise the sales tax for another
three years.

It says the government should first cut wasteful spending
and tap government reserves.


The party has ruled out a coalition with the DPJ and has
said it will not cooperate on policies. Founded by members of a
Buddhist sect, Soka Gakkai, Japan’s third-largest political
party favours drastic reform of the tax system, including the
sales tax, but has not specified by how much the sales tax
should be raised.

The party, which was the Liberal Democratic Party’s
coalition partner when it was in power, wants the government
and the Bank of Japan to cooperate to achieve inflation of 1-2


Headed by Yoichi Masuzoe, a popular former health minister
who left the Liberal Democrats in April, the party says Japan’s
finances will be unsustainable without a sales tax increase to
over 10 percent by 2020.

The pro-reform party has also called for a 1-2 percent
inflation target and favours lowering the corporate tax rate to
25 percent from the current rate of around 40 percent.


Led by former finance minister Kaoru Yosano and ex-trade
minister Takeo Hiranuma, the party wants to raise the sales tax
to 8 percent from 2012/13 before raising it to 12-15 percent
after the economy recovers. The party of former Liberal
Democratic Party lawmakers also wants to lower the corporate
tax to 30 percent from 2012/13.


Founded by heads of local governments, the group has
pledged to halve the corporate tax rate to 20 percent and to
gradually raise the consumption tax to 10 percent, using the
revenues to fund social security costs.


The LDP, ousted by the Democrats last year after more than
50 years of almost continuous rule, is the main opposition
party. It has called for the sales tax to be raised to 10

Like the Democrats, LDP members range from proponents of
market-friendly reforms to those who favour a gentler
capitalism. Both are also home to diplomatic doves seeking
closer ties with Asia to pro-U.S. advocates of a bigger
security role for Japan.

(Reporting by Chisa Fujioka and Kiyoshi Takaneka; Editing
by Michael Watson)

RPT-FACTBOX-Japan ruling party’s possible coalition partners