Japanese voters hammer ruling party in election

Japanese voters have handed a stinging electoral defeat to the ruling party in elections for parliament's upper house, exit polls showed, rejecting a plan to raise tax and handicapping the fledgling government struggling to keep the economy from financial meltdown.

Prime minister Naoto Kan of the progressive Democratic Party of Japan had warned the country could face a Greek-style meltdown if it did not get its finances in order - possibly by raising the sales tax.

However, projected losses in the upper house of parliament indicate voters have rejected his solution, and will make it difficult for his government to effectively revive the economy.

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