Campaign begins for Mori's successor

The LDP's largest faction is backing former prime minister Ryutaro Hashimoto

In this story: Differing economic views Koizumi profile RELATED STORIES, SITES

TOKYO -- Politicians from Japan's ruling Liberal Democratic Party (LDP) prepared Sunday for a party election to select the successor to unpopular Prime Minister Yoshiro Mori.

Although no contender has declared candidacy for the Liberal Democratic Party's April 24 election, former prime minister Ryutaro Hashimoto and self-styled reformer Junichiro Koizumi are seen as the leading contenders.

Hashimoto has the backing of the LDP's largest faction of some 100 members. Koizumi has public appeal but is closely identified with Mori.

Mori, whose popularity vanished after a string of scandals and blunders during his year in office, announced Friday that he would resign.

Ruling party lawmakers had been keen to oust Mori in the hope that replacing him would improve their chances in a key Upper House election set in July.

LDP Secretary General Makoto Koga said Sunday that the term for the next prime minister will end in September under party rules, but hoped that the winner would remain in office longer.

"We are hoping for a long-term administration," Koga told national broadcaster NHK.

The move toward the LDP election came just after the government approved a package of economic steps to bolster Japan's flagging economy.

Differing economic views

The package will help banks tackle non-performing loans reaching 12.7 trillion yen ($102 billion) and support the stock market.

Whoever is elected LDP president is most likely to become Japan's next prime minister, given the party's dominant position in parliament.

The support of LDP policy chief Shizuka Kamei and his faction would be a key factor in deciding who would become the next country's leader, domestic media said.

The Japanese yen continued to weaken against the U.S. dollar last week

"I believe this group will be the deciding factor," Taku Yamasaki, who heads a small group in the multi-faction LDP, told Fuji Television on Sunday.

Kamei was reported to be leaning towards Hashimoto, who resigned from the top post after the LDP performed abysmally in a 1998 Upper House election.

However, Kamei and Hashimoto do not necessarily agree over how to handle the economy.

Kamei supports public spending, the traditional antidote for the weak Economy, which has largely failed despite a decade of increasingly large packages.

Such is popular within the LDP, especially for keeping rural voters happy.

During his term, Hashimoto tried to rein in public spending which pushed Japan's debt load to one of the worst among industrialized nations.

However, he was blamed for choking off a nascent economic recovery in 1996 by raising the sales tax and cutting spending.

With the support of both LDP factions, Hashimoto appears to have the upper hand, unless the vote is widened to LDP members in the provinces.

Rank-and-file members from LDP's local branches have demanded a larger say in selecting the party president, owing to the Mori experience.

Mori was chosen in a smoke-filled room by a cabal of LDP powerbrokers last year, when Keizo Obuchi suffered a fatal stroke, andproved unfit for the job.

Koizumi profile

Koizumi is considered an eccentric politician with his slightly unkempt, wavy hair.

He ran in the race to head the LDP two years ago.

Koizumi made his mark with a campaign to privatize the postal and savings system to get Japan's massive public debt under control.

However, many LDP lawmakers with ties to postal workers opposed the plan.

Financial markets would likely welcome a Koizumi administration, at least at first, for its air of reform.

Other possible contenders include Economics Minister Taro Aso, 60, and Trade Minister Takeo hiranuma, 61.

Younger LDP lawmakers have been urging Aso to run.

Reuters contributed to this report.

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Mori's Washington summit 'meaningless'
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Yoshiro Mori biography
Liberal Democratic Party

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