TOKYO, Aug 31, 2009 (AFP) - Japan's Democratic Party Monday began talks on forming a new government, faced with the challenge of reviving the struggling economy and reshaping ties with key allies after its crushing election win.
Yukio Hatoyama's centre-left Democratic Party of Japan (DPJ) is under heavy pressure to get to work quickly on addressing the huge hurdles facing this fast-greying country and pulling it out of its long economic malaise.
His team huddled to select cabinet ministers and work on a smooth transition from the government of Prime Minister Taro Aso, who conceded defeat and said he would step down as president of the Liberal Democratic Party (LDP).
|Japanese Prime Minister and president of the ruling Liberal Democratic Party, Taro Aso, bows at the end of a press conference at the LDP headquarters in Tokyo on August 31, 2009. Disgraced Aso announced his plan to step down. (AFP photo)|
The DPJ won 308 seats in the powerful 480-member lower house in the Sunday poll, ending more than half a century of almost unbroken conservative rule, according to collated official results.
Hatoyama, 62, who is expected to be confirmed by parliament as prime minister in about two weeks, is set to form a coalition with smaller partners such as the Social Democratic Party and the People's New Party.
The US-trained engineering scholar, the scion of a wealthy political dynasty, promised to build consensus and avoid "arrogance" in government after ousting Japan's conservative old guard.
"We will not just bulldoze our policies," he told public broadcaster NHK. "We must exercise patience and seek people's understanding because we have been given such latitude."
Japan's usually risk-averse electorate, frustrated with the country's worst post-war recession, punished Aso at the polls and forced the business-friendly LDP from office for only the second time since 1955.
Aso said Monday that he would resign as party head, admitting that the "outcome of the election was extremely severe for the LDP."
"We must start anew," a stern-faced Aso added. "To take back the government, I strongly feel that we must regenerate the party."
His right-hand-man, Chief Cabinet Secretary Takeo Kawamura, said the election defeat was a call for the LDP to change and an "extremely harsh result for the ruling party and the government," while vowing a smooth transition.
The DPJ has signalled a solid but less subservient partnership with traditional ally the United States and a desire to boost its regional ties, promoting a European Union-style Asian community and common currency.
In Washington, President Barack Obama's White House said it expected a "strong alliance" with the DPJ and hoped to hold early consultations with Tokyo, including on the stand-off with nuclear-armed North Korea.
"We are confident that the strong US-Japan alliance and the close partnership between our two countries will continue to flourish under the leadership of the next government," White House spokesman Robert Gibbs said.
As premier, Hatoyama would be expected to attend the UN general assembly in New York and a G20 summit in Pittsburgh in September, and seek early talks with Obama, Chinese President Hu Jintao and other world leaders.
On the home front, the new government faces the formidable task of reviving the economy after its worst recession in decades, with unemployment at a record high 5.7 percent, and addressing the threat of a looming demographic timebomb.
The DPJ has promised to put the focus more on households than big business, with the aim of boosting domestic demand and raising the birth rate, with the population projected to soon go into decline.
The election win "is a historical event, but this is very much the beginning," said Noriko Hama, a professor of economics at Doshisha Business School in Kyoto.
"There is very little room for dithering or dragging their feet. Japan will have to break with its past, or I do not think we will be able to cope with the social disparities and the economic situation."