Eriko Fukuda (second right) from the Democratic Party of Japan celebrates after defeating ruling her Liberal Democratic Party rival in Isahaya city on August 30.

Japan’s Democratic Party Monday began talks on forming a new government, facing the tasks of reviving the struggling economy and reshaping ties with key world 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 solving the huge challenges facing this fast-greying country and pulling it out of its long economic malaise.

Media projections indicate that the DPJ won 308 seats in the powerful 480-member lower house in the Sunday poll, ending half a century of almost unbroken conservative rule. Official results were due later Monday.

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 a day after his party’s historic win over 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 worst post-war recession, punished Prime Minister Taro Aso and forced the Liberal Democratic Party (LDP) from office for only the second time since 1955.

Aso said he would resign as head of the LDP to “take the responsibility” for his party’s heavy defeat, set to leave it with only about 119 seats.

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 next month’s UN general assembly in New York and a G20 summit in Pittsburgh, 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 warding off a possible 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 in the ageing country where the population is projected to soon go into decline.

“It 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.”

Japan’s dailies warned the DPJ that their victory owed just as much to voter anger toward the conservatives as to enthusiasm for their own policies.

“The will of the people caused an avalanche for the DPJ,” the Asahi Shimbun said in an editorial. “But if we ask whether this shows confidence in a DPJ government, the answer is probably ‘no’.”

The top-selling Yomiuri Shimbun said voters are “rather worried” over the untested DPJ’s capability to govern.

“They fared well under the slogan of ‘government change’. Now that it has come true, what is important is how they will manage a government in real politics,” it said.

Investors initially appeared to welcome the election result, chasing share prices up to a new 2009 high in early trade, although the rally later fizzled out by lunch due to concerns about a stronger yen.

Source: AFP