World Watches as Japan Plays Insider Politics

You'd think the Liberal Democratic Party (LDP) would have gotten the message.

Fed up about the economy, Japanese voters turned out in force to punish the ruling party in an upper-house election that cost the LDP 17 seats and sent its leader, Prime Minister Ryutaro Hashimoto, packing. On July 24, the LDP will vote to choose Mr. Hashimoto's successor, who will also become Japan's next premier.

Early indications are that the LDP will elect the most conventional, least reform-minded candidate of the bunch - Foreign Minister Keizo Obuchi. The vote, demanded by younger LDP members, represents a small break from the past and a recognition by the party that it has to change. The LDP's future - and that of Japan's troubled economy - will depend on the leader it chooses.

As the candidates stump among their colleagues, two demanding audiences are watching: an angry public that wants to see action on the economy and the world's financial markets, waiting to pass judgment.

Both may be disappointed.

"Unless something drastic happens, I think Mr. Obuchi will be elected," says Ichita Yamamoto, an LDP member who sits in the upper house of parliament. "There's a feeling among people [in the party] that they should vote for the winner, and the Obuchi faction has done a good job of convincing everyone he will win," Mr. Yamamoto says.

Politics in Japan has long meant politics within the LDP. The party has more or less governed the country since 1955, with only a 10-month stint in opposition in the early 1990s. The real political action has always been in the often-bitter struggles for supremacy between the party's factions.

One notable aspect of this election is that two of the three candidates are from the same camp, a development that suggests the factions' power and cast-iron unity may be waning. The 413 LDP members who will vote - the party's representatives in parliament and leaders from Japan's 47 prefectures - will cast secret ballots, meaning they can ignore their factions' directives and vote their conscience, making the result unpredictable.

Here's a look at the three men in the running for Hashimoto's job. Their policy differences are slim, and the race is boiling down to style. All promise reform and tax cuts in efforts to revive the economy.

Keizo Obuchi, the front-runner and current foreign minister, has recently been stung by a widely quoted comment that ascribes to him "all the pizazz of cold pizza." So stung, in fact, that he invited reporters over to his house and served up slices - piping hot. That gesture aside, the notoriously bland Mr. Obuchi is not a galvanizing politician. He is, however, well-liked and leads the LDP's largest faction. He is known as a staid company man - "an old man who cannot get away from old politics," says Takashi Mikuriya, a political scientist at Tokyo Metropolitan University.

But in a country where voters fear strong leaders, Obuchi uses his lack of pizazz to advantage. "He knows himself, that he's not brilliant or dynamic as a politician, but he tries to capitalize on it," says upper-house member Yamamoto. "He tries to be very modest, very sincere, and show that he can listen."

Seiroku Kajiyama, a jowly ex-Cabinet member, may be the Lyndon Johnson of Japanese politics, says John Neuffer, an analyst at Mitsui Marine Research Institute in Tokyo. Part of the political scene since 1969, Mr. Kajiyama tends to inspire either loyalty or loathing in those around him. Now known for his reformist zeal ("I'm on a mission to expose the [banks'] bad loans," he says), Kajiyama matured in politics as a member of a faction famous for under-the-table political fund-raising. He's not known for his tact. He has riled Americans with comments comparing blacks to prostitutes, saying property values fall when either moves into a neighborhood. Asians protested his suggestion that sex slaves to the Japanese army in World War II, known as "comfort women," worked for the money. He apologized for both comments.

Health and Welfare Minister Junichiro Koizumi - young, telegenic, and ambitious - rounds out the troika. He comes out on top in public-opinion polls, but has little support within the LDP, which would hamper his ability to get things done.

At the same time, analysts don't rule out his victory, which might help the party reinvent itself and survive a general election. "If Mr. Koizumi becomes the next prime minister, it would definitely force the LDP to have some kind of internal political reform," says Professor Mikuriya. In the last vote for party president, Koizumi ran against Hashimoto, who then appointed him to the Cabinet. A similar arrangement might emerge this time, in that Obuchi may appoint Kajiyama as finance minister in order to placate foreign and market critics.

"The dilemma is that if they tap Obuchi, they will leave the party wide open to charges from the opposition that the government is illegitimate," says Mr. Neuffer, citing polls that favor both Koizumi and Kajiyama over the front-runner.

At least one LDP member is worried. Yamamoto took a snap poll at the end of an address yesterday to hotel owners on the southern island of Kyushu. He says 60 percent favored Kajiyama, 40 percent wanted Koizumi, and no one raised a hand for Obuchi.

"I don't know how the LDP can balance the feeling in Nagatacho" - Tokyo's Capitol Hill - "and the mood among the public," he says.