Although it appears that Fukuda is leading Aso (both sons or grandsons of previous Prime Ministers) he might have some issues as some Japanese feel he is too soft on China and especially on North Korea.  It appears that during the investigation Koizumi launched concerning the Japanese citizens that N.Korea kidnapped, Fukuda stood in opposition when he was head of the lower house of the Diet.  I’m still trying to figure out why this was.  This could hurt him as Japanese took the kidnapping issues very seriously.

Next Japan PM faces parliament fight

Thu Sep 20, 2007 9:54pm EDT

By Linda Sieg

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TOKYO (Reuters) – Japan’s Yasuo Fukuda looks likely to cruise to victory in a ruling party leadership race on Sunday to become the next prime minister. Then comes the hard part.

The 71-year-old Fukuda, seen as an experienced moderate who can avoid the missteps that forced his predecessor Shinzo Abe to resign, could well get a boost in public opinion polls after his expected confirmation as prime minister next week, analysts say.

But Japan’s next leader faces a divided parliament, where combative opposition parties control the upper house, as well as conflicting pressures to help out those left behind by recent economic reforms while also reining in a huge public debt.

“Politics is the art of the possible and unfortunately, the possibilities are very limited,” said Jesper Koll, president of investment advisory firm Tantallon Research Japan.

“That’s the real political risk — not getting things done.”

Abe, who turned 53 on Friday, abruptly announced his resignation last week after a year in office during which he improved ties with China but was plagued by scandals and gaffes by his ministers that contributed to a humiliating election rout.

The bland and bespectacled Fukuda, the son of a former prime minister and a proponent of warmer ties with Asian neighbors, quickly won the backing of most ruling Liberal Democratic Party (LDP) factions. He is expected to easily defeat former foreign minister Taro Aso in Sunday’s LDP leadership election.

The victor is sure to become prime minister by virtue of the ruling coalition’s huge majority in parliament’s powerful lower house.

The hawkish Aso — a fan of “manga” comic books who casts himself as a strong leader — saw his early lead in the LDP race evaporate suddenly, partly because of his close ties to Abe.

“Aso is part of the old Abe regime. No matter how much he jokes and talks about ‘manga’, he’s still no change,” said Chuo University political science professor Steven Reed.

“With Fukuda, going back to the old ways looks like change.”

Both Fukuda and Aso have pledged to pay more heed to those left behind by economic reforms begun under Abe’s predecessor, the charismatic Junichiro Koizumi, whose cuts in wasteful public works spending won plaudits from many voters but angered traditional LDP backers in rural areas.

BREAD, BUTTER AND NAVAL MISSIONS

Abe’s conservative agenda including a bolder global security role for Japan and more patriotism in the schools will almost certainly take a back seat under the next Japanese leader.

“Voters want people to deal with issues close to their hearts, like pensions and the budget,” Koll said.

Still, one of the first challenges for the new premier will be a battle to extend past a November 1 deadline a naval supply mission in support of U.S.-led operations in Afghanistan that opposition parties are against.

Though an advocate of a less U.S.-centric foreign policy, Fukuda, like Aso, has stressed the need to extend Japan’s refueling mission of coalition ships in the Indian Ocean.

Fukuda has not ruled out using the ruling camp’s two-thirds lower house majority to override the opposition-controlled upper house, but has said that would be a last resort.

Analysts said main opposition Democratic Party leader Ichiro Ozawa would be taking a risk if he forced a showdown over the naval mission — which most Japanese voters now support — to trigger an early election for the lower house.

“The Democrats couldn’t win an election on this issue,” said Yasunori Sone, a Keio University political science professor.

EARLY POLL?

No lower house election need be held until late 2009, but pundits say a parliamentary deadlock could spark one sooner.

The LDP-led coalition can use its lower house majority to enact laws, but may well be wary of a public backlash if it does.

However the alternative — seeking deals with the opposition — would make bold policy virtually impossible even as Japan faces a rapidly ageing population and a related spike in welfare spending.

“Now we need politics more than before because there are reforms that need to be done,” said Martin Schulz, an economist at Fujitsu Research Institute. “I am not optimistic that we will get major steps in any direction.”

Some analysts said the new Japanese leader could risk a snap election in coming months if public support jumps. But the LDP is likely to balk at a move that would almost certainly see it lose seats, if not its majority.

Many pundits now foresee a showdown after the passage of the state budget for 2008/09 in late March.

The budget takes effect one month after approval by the lower house even if rejected by the upper chamber, but laws to implement it need approval by both houses.

“That will be the biggest trial for Fukuda,” Sone said.

© Reuters 2006. All rights reserved.

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