Japan's opposition prepares for government

The opposition Democratic Party of Japan begins talks on forming a government after a resounding victory in the general election.

Japan's Democratic Party today 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 gathered 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). The DPJ won 308 seats in the powerful 480-member lower house in yesterday's poll, ending more than half a century of almost unbroken conservative rule, according to collated official results.

Mr 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. Japan's usually risk-averse electorate, frustrated with the country's worst post-war recession, punished Mr Aso at the polls and forced the business-friendly LDP from office for only the second time since 1955.

Mr Aso said today that he would resign as party head, admitting that the "outcome of the election was extremely severe for the LDP". The DPJ has signalled a solid but less subservient partnership with Japan's traditional ally the United States and a desire to boost its regional ties, promoting a European Union-style Asian community and common currency. 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 per cent, 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. * AFP