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By Linda Sieg
TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe's ruling bloc swept to victory in a weekend Tokyo election, a sign it's on track for a hefty win in a July national vote that could strengthen Abe's hand as he aims to end economic stagnation and bolster defense.
Politicians and pundits had been eyeing the outcome of the Tokyo Metropolitan Assembly election for clues to how well Abe's Liberal Democratic Party and its junior partner, the New Komeito, will fare in a July 21 election for parliament's upper house that opinion polls suggest they will win handily.
"We have received a good evaluation of our handling of the government over the past six months," Abe, who campaigned heavily for the local vote, told reporters. "We would like to do our very best so people can feel that the economy is recovering as soon as possible."
All of the LDP's 59 candidates won seats in the 127-member Tokyo assembly to regain the top spot. It was the party's biggest victory in the metropolis since 2001, when it was buoyed by the popularity of charismatic leader Junichiro Koizumi.
All of the New Komeito's 23 candidates also won, though with fewer votes than four years ago.
In the latest sign of its faltering fortunes, the main opposition Democratic Party of Japan slid to 15 seats, fewer than the Japan Communist Party's 17 seats.
Osaka Mayor Toru Hashimoto's right-leaning Japan Restoration Party won just two seats, reflecting his waning popularity after remarks that seemed to justify Japan's wartime military brothels. That could spell trouble for any LDP hopes of allying with Hashimoto to push constitutional reform, although another small conservative party, the Your Party, won seven seats.
THE "TINA" EFFECT
Voter turnout, however, was a near record low at 43.50 percent. Calculations by the Tokyo Shimbun daily showed the LDP won 46.5 percent of the seats with 15 percent of all eligible votes.
"This tells us that the LDP is likely to win the upper house primarily because the opposition is divided and there is no alternative," said Chuo University political science professor Steven Reed.
Some pundits are calling that the "TINA" effect, borrowing a slogan of Margaret Thatcher of which Abe is also said to be fond.
Pledging to revive growth in the world's third-biggest economy, bolster its defense posture and revise Japan's pacifist constitution, Abe returned to Japan's top job after the LDP's lower house election win in December. But the LDP and New Komeito lack a majority in the upper house, which can block legislation.
That "twisted parliament" has been foiling policy implementation since the LDP's massive defeat in a July 2007 upper house election during Abe's first troubled 12-month term, which ended with his abrupt resignation two months later.
Some analysts said the solid victory in Japan's capital spelled good news for Abe's pledges to implement structural reforms including deregulation, the so-called "Third Arrow" of his "Abenomics" prescription to end stagnation. The first two "Arrows" are hyper-easy monetary policy and spending.
"The election result proves that the LDP can win big in the cities. This proof gives PM Abe an alternative to relying on agriculture and other non-urban vested interest groups," said a report by Morgan Stanley MUFG in Tokyo.
Others, however, worry that too big an LDP victory in the upper house could mean ballooning ranks of lawmakers with close ties to vested interests that oppose structural reforms.
Surveys of voter preferences for the upper house vote show the LDP has a hefty lead over the demoralized opposition.
A June 21-23 Nikkei business daily survey showed 47 percent plan to vote for the LDP versus 7 percent for the Democrats.
Abe's support rates slipped marginally to 66 percent in the Nikkei poll, in line with recent declines that mirror a fall in Tokyo share prices reflecting concern over whether his "Abenomics" policy prescription to end stagnation will succeed.
Financial markets applauded the first two "Arrows" in Abe's policy quiver but have grown skeptical about whether he means to keep pledges of structural reforms including deregulation.
Steep falls in share prices or verbal gaffes by Abe could erode support ahead of the national vote. Even so, analysts say it would be almost impossible for the ruling bloc to lose.
(Reporting by Linda Sieg; Editing by Stephen Coates)