Voters to reveal judgment on performance of ten-month-old government

FEVERISHLY giving speeches on the final day of campaigning yesterday, candidates tried to woo Japanese voters before parliamentary elections that are widely seen as a referendum on the Democrats' ten months in power.

Whether Japan needs to raise its sales tax has emerged as a key topic in today's vote, where half the seats in the 242-member upper house are up for grabs, although Prime Minister Naoto Kan has toned down his tax hike talk after his ratings took a hit.

The election will not affect the ruling party's grip on power because it has a hefty majority in the more powerful lower house that chooses the prime minister.

But recent polls show that Kan's party will lose seats in the upper house, which could complicate its ability to pass legislation and force it to find new coalition partners.

Kan has set a target of winning 54 seats, the same number as the Democrats have now, but newspaper surveys suggest that the party is more likely to get about 50 seats.

Promising to cut wasteful spending and bring more transparency to politics, the Democrats swept to power in last August's lower house elections which ended 55 years of nearly unbroken rule by the conservatives.

So far they have delivered mixed results. The Democrats have put the brakes on many large public works projects that were considered wasteful, but their first prime minister, Yukio Hatoyama, disappointed voters by breaking a campaign pledge to move a US Marine base off the island of Okinawa and getting involved in a funding scandal.

Kan, a plain-talking former finance minister with a grass-roots activist background, enjoyed an initial surge in approval ratings when he came to office a month ago after Hatoyama's resignation.

But his immediate suggestion, that Japan needs to raise its sales tax from 5 per cent to as much as 10 per cent in coming years, has dented the popularity of his cabinet and party.

Kan argues that tax reforms are needed to reduce the country's ballooning public debt as the population in the world's second-largest economy ages and declines.

He has warned that if it does not take aggressive steps, Japan could face a fiscal crisis similar to that taking place in Greece.

Experts say the comparison is a stretch because most government bonds are held by domestic stakeholders, who are unlikely to dump the securities.

Attempting to show that his party is fiscally responsible, Kan may have miscalculated, analysts say, assuming many voters think higher taxes are inevitable.

Throughout the country yesterday, candidates drove around in campaign vans, speakers blaring and aides waving out the window, stopping to give speeches.

A total of 437 candidates from 12 parties are vying for the 121 spots.

The public's interest in the election has wavered as the campaign has coincided with the World Cup - in which Japan's team did better than expected - and a scandal that has hit the traditional sport of sumo wrestling.

During the past two weeks, major Japanese stations devoted about as much time to the sumo scandal as to the election, and far more hours to the World Cup, according to calculations by the mass circulation Mainichi newspaper.z