Abenomics at stake as campaign starts for Japan upper house race

Prime Minister Shinzo Abe said Thursday the Japanese economy is recovering after he took office while opposition parties warned of the downside of his policies, called "Abenomics," as official campaigning began for the July 21 upper house election, a key test of his leadership over the past seven months.

"We are at the entrance of economic recovery. If we change this, we will lose everything," Abe said in a stump speech in Tokyo. He aims to regain control of the House of Councillors and solidify his power base to pursue key policy objectives, such as revising the nation's pacifist Constitution to enhance its defense capabilities.

Abe, who heads the Liberal Democratic Party, set out on the campaign trail earlier in the day in Fukushima Prefecture, an area hit hard by the March 2011 earthquake, tsunami and nuclear crisis.

"We cannot proceed with reconstruction as well as economic revival if the Diet remains divided. I want to end it," he said, referring to the dominance of opposition parties in the upper house.

But Banri Kaieda, leader of the main opposition Democratic Party of Japan, criticized Abenomics, aimed at turning nearly two decades of deflation into mild inflation through monetary and fiscal stimulus and private-sector investment.

"If the LDP wins this election, your livelihoods will be endangered," Kaieda said in a speech in Iwate Prefecture, also located in quake-hit eastern Japan. "We must face off against the Abe administration, which will destroy people's lives."

Half of the 242 seats in the upper house are up for grabs every three years under a combination of constituencies and proportional representation. In the latest election, 433 people filed their candidacies for the 121 seats at stake.

The LDP and its junior coalition partner, the New Komeito party, will have to win a total of 63 seats to secure an overall majority, as they already hold 59 seats that will not be contested this time.

Hitting the streets in search of popular support, opposition leaders highlighted concerns about the downsides of Abenomics, including higher consumer prices at a time when wage increases have yet to be implemented by many companies.

The Japan Restoration Party, co-headed by Osaka Mayor Toru Hashimoto, said Abe is not sufficiently pursuing deregulation in sectors such as agriculture and electricity. "The LDP has momentum but cannot implement in-depth reforms. We should not allow it to win everything," Hashimoto said in Osaka.

Abe has pointed to a recovery in Japanese stock prices as evidence his policies are working. "The real economy has been improving. We have no other way (than Abenomics) to beat deflation," he said.

New Komeito party leader Natsuo Yamaguchi said in Saitama Prefecture, "The major focus (of the election) is how to beat deflation."

The ruling camp has an overwhelming majority in the more powerful House of Representatives. But lacking control in the upper chamber makes it difficult for the government to push its bills through the Diet.

Abe was forced to step down as prime minister in 2007 due to political deadlock in the Diet that stemmed from his defeat in an upper house election the same year.

In the upcoming election, candidates and parties are allowed for the first time to use e-mail and social networking sites for campaigning. The Diet enacted legislation in April to lift a ban on online campaigning in an attempt to counter political apathy, especially among young people.

Other issues voters may bear in mind aside from Abenomics include increasingly tense relations with China and South Korea, the planned sales tax rate increase in April and concerns about the government's policy of restarting idled nuclear reactors once they are deemed to be safe.

Opposition parties are struggling to erode the relatively high support rate for Abe's government, launched in December after the LDP trounced the DPJ in a general election and returned to power after three years in opposition.

In the run-up to the election, the ruling coalition scored a large victory in the June 23 Tokyo metropolitan assembly election, with all 82 LDP and New Komeito candidates winning seats in the 127-member assembly.

On Thursday, Your Party leader Yoshimi Watanabe said in Tokyo that Japan must put an end to politics controlled by bureaucrats. Japanese Communist Party leader Kazuo Shii also spoke in the capital, pledging to seek comprehensive reforms for the ordinary citizens. The JCP more than doubled its seats in the Tokyo metropolitan election, from eight to 17, to become the third-largest party in the assembly.

People's Life Party leader Ichiro Ozawa said in Chiba Prefecture that Abenomics must be stopped before it creates a society in which the weak are becoming victims of the strong.

Kuniko Tanioka, who represents the Green Wind party, said in Tokyo that it will seek policies desirable for women, while Mizuho Fukushima told citizens in Yokohama that her Social Democratic Party will oppose Abe's attempt to revise the country's Constitution.