Japan opposition gives ex-PM Abe second chance amid China feud

TOKYO (Reuters) - Japan's main opposition party picked former prime minister and security hawk Shinzo Abe as its new leader, giving him another shot at the premiership and possibly alarming Beijing and Seoul, both locked in territorial disputes with Tokyo.

Opinion polls suggest that the conservative Liberal Democratic Party (LDP), ousted in 2009 after more than 50 years of almost non-stop rule, will come first in a lower house election expected within months. That would put its leader in position to become the next prime minister.

Abe, 58, abruptly quit after just a year on office due to ill health in 2007. He won a run-off ballot against Shigeru Ishiba, 55, a conservative security expert.

All contenders in the race to lead the LDP had struck hawkish tones as a row with China flared this month after Prime Minister Yoshihiko Noda's government bought some disputed islets in the East China Sea from their private Japanese owner.

Abe was the most vocal in urging Tokyo take a tougher line in its territorial rows with China and South Korea.

"I think China will be alarmed as will Korea," said Sophia University professor Koichi Nakano. "I think this might push some of the leaders to start improving ties before the LDP comes to power."

Nakano said Abe's election could be good news for Noda's struggling Democrats, but others said voters disappointed by the ruling Democrats' three-year rule would still prefer the LDP.

"I don't think anyone wants to give the Democratic Party a second chance," said Katsuhiko Nakamura, executive director at think tank Asian Forum Japan.

BUSINESS LOBBY WELCOMES ELECTION

Japan's biggest business lobby welcomed Abe's election. "The new (LDP) president is a political leader well versed in policies, has abundant experience and the ability to get things done," Keidanren Chairman Hiromasa Yonekura said in a statement.

The prospect that Abe could lead the next government after an election which Noda promised to hold "soon" may ring alarm bells at the Bank of Japan.

Abe has been among most vocal proponents of amending central bank laws to force it to do more to prop up the economy.

"His stance is cautious about the sales tax hike and focuses on economic growth. He is also a reflationary policy advocate," said Hidenori Suezawa, chief bond strategist at SMBC Nikko Securities. "It is expected that pressure on the BOJ to implement more easing policy will increase."

Abe, who became Japan's youngest post-World War Two premier in September 2006, quit after a year marked by scandals, a big election defeat and a crisis over Japan's support for U.S.-led operations in Afghanistan. He cited ill health as the reason.

The grandson of a wartime cabinet member who became one of Japan's post-war prime ministers, Abe has long called for Tokyo to tighten its alliance with the United States. He wants to revise the post-World War Two pacifist constitution.

He has also gained popularity for his tough stance on the emotive issue of abductions of Japanese citizens by North Korea decades ago.

Abe, who belongs to a conservative camp that thinks Japan has apologized too much for its wartime past, wants to replace a 1993 government statement apologizing to women forced to serve as sex slaves at wartime military brothels.

He also seeks the revision of a historic 1995 statement by then-prime minister Tomiichi Murayama, apologizing for suffering caused by Japan's wartime aggression.

Neither change would win friends among Asian neighbors.

When in office, however, Abe took a big step to repair Sino-Japanese ties, which had frayed during his predecessor Junichiro Koizumi's five years in office, in part because of Koizumi's annual visits to Tokyo's Yasukuni Shrine for war dead. Abe's first visit abroad after taking office was to China.

"Based on past precedent, despite his strong rhetoric during the party race, I think he would deal with China strategically," Asia Forum Japan's Nakamura said.

The LDP, long a broad party home to both security hawks and doves, has tilted to the right in recent years.

Opinion polls suggest that it will need a coalition partner and Abe has made it clear he is eyeing a possible tie-up with a party led by populist Osaka Mayor Toru Hashimoto, which critics say is tapping simmering nationalist sentiment.

Whoever takes charge of the world's third-largest economy after the election will face various unfinished business and deep-rooted problems dogging the economy.

Rebuilding northeast Japan after a March 2011 earthquake and tsunami is far from complete and full decommissioning of the crippled Fukushima nuclear plant will take decades.

Any new government will have to grapple with a revamp of energy policy amid deep public worry about nuclear safety. Abe has already made clear he does not favor ditching atomic power.

In addition, a plan to double the sales tax that Noda managed to push through an opposition-controlled upper house by promising early elections is seen as just a first step towards cutting Japan's ballooning public debt.

(Additional reporting by Antoni Slodkowski and Kiyoshi Takenaka; Editing by Linda Sieg and Ron Popeski)

Source: http://news.yahoo.com/japan-opposition-picks-leader-possible-next-pm-amid-011823326--business.html

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