Japan premier wins vote to stay in power

Japanese Prime Minister Naoto Kan has survived a challenge to his leadership after being re-elected as president of the ruling Democratic Party.

Mr Kan defeated challenger Ichiro Ozawa, a veteran powerbroker with a 40-year political career.

Mr Kan’s victory means Japan will be spared another change in leadership, as the country confronts a surging yen and spat with China over a collision near disputed islands.

Mr Kan, in office for just three months, defeated Mr Ozawa by an unexpectedly wide margin, 721-491.

Parliamentary party members accounted for two-thirds of the votes, while rank-and-file members around the country made up the remaining third.

A party heavyweight, Mr Ozawa quit as the party’s number two in June, amid a political funding scandal.

The leadership tussle has distracted Japan at a time when it desperately needs to confront a host of problems, from a sluggish economy and a surging yen - which hit a new 15-year high against the dollar today – to an escalating spat with China over a ship collision near disputed islands.

Had Mr Ozawa won, he would have been Japan’s third prime minister in a year.

A fiscal disciplinarian who has urgently called for Japan to create more jobs to revive the economy, Mr Kan is far more popular among the general public than Mr Ozawa, who is widely viewed as a backroom kingmaker with a scandal-tainted image. Mr Ozawa could be indicted as early as next month over allegations of political finance irregularities.

Famous for standing up to Japan’s bureaucrats when he exposed a government cover-up of HIV-tainted blood in the mid-1990s, Mr Kan has pledged to make politics more transparent and accountable. Surveys show that voters prefer him by a margin of four to one.

Mr Ozawa, a fixture in Japanese politics for 40 years, mounted a strong challenge, tapping into his deep support base within the party. A master strategist, he is widely credited with engineering the Democrats’ landslide victory a year ago, unseating the conservative Liberal Democratic Party which ruled Japan for most of the post-Second World War era.

While Mr Ozawa said he would back Mr Kan if he lost, some analysts have speculated that he may try to break away from the Democrats to form his own party or even join with the LDP.