Japanese leader dissolves parliament and calls elections

Japan’s upper house of Parliament voted down legislation to split up and sell the country’s postal service today, prompting Prime Minister Junichiro Koizumi to follow through on a threat to call snap elections that could shake the ruling party’s grip on power.

Defections from Koizumi’s own Liberal Democratic Party helped defeat the reform package by a 125-108 vote, dealing a painful setback to the prime minister’s longtime quest to privatise the postal savings and insurance businesses and open their massive deposits to private investors.