Trouble Looms for Japan’s Once-Mighty DPJ; Beleaguered Party Projected to Lose Last Grasp on Power in Upper House Race

Updated July 10, 2013, 1:26 p.m. ET

Trouble Looms for Japan’s Once-Mighty DPJ

Beleaguered Party Projected to Lose Last Grasp on Power in Upper House Race


TOKYO—Four years after its historic overthrow of the entrenched one-party rule of the Liberal Democratic Party, the Democratic Party of Japan is set to lose its last grasp on power with polls predicting a catastrophic loss for the beleaguered party in the coming upper house race.

The DPJ, led by Banri Kaieda is projected to lose half its 44 seats up for election in the July 21 race, according to surveys by Japan’s major dailies. The DPJ, which for now is the largest single voting bloc in the upper chamber, will be giving up its presence as the dominant opposition force, as the governing LDP-New Komeito coalition’s bicameral control of parliament all but eliminates the DPJ’s tactical recourse against the enactment of government-proposed bills.The DPJ’s disastrous defeat in the December general elections marked not only the end of its three-year reign, but also dashed Japan’s hopes for a bipartisan system where power is alternated between the top two parties.

After the hugely popular premiership of Junichiro Koizumi ended in 2006, the DPJ succeeded in channeling the public’s discontent with a revolving door of LDP prime ministers—a trend set in place, ironically, by Prime Minister Shinzo Abe’s first short-lived premiership of 2006-2007.

Frustrated by the pork-barreling politics of the LDP that essentially ruled Japan for over half a century, Japanese voters threw their support behind the DPJ. It was the first time that the LDP was challenged by a single opposition party rather than a scattered group of small opposition forces. As a result, a DPJ government was formed under the leadership of Yukio Hatoyama in 2009, initially boasting an approval rate of over 70%.

“At the moment when I was elected prime minister by both the House of Representatives and the House of Councillors, I was deeply moved, trembling at the thought that Japanese history was in the making,” Mr. Hatoyama said in his first address to the nation as prime minister.

But almost as soon as it rose to power, the DPJ began its fall from grace. Mr. Hatoyama resigned after a year over his fumbling of a controversial relocation of U.S. military bases in Okinawa. His successor, Naoto Kan was pushed out of office by both the opposition and his fellow DPJ lawmakers for his mishandling of the accident in Fukushima Daiichi nuclear power plant following the March 2011 disaster.

By the time Yoshihiko Noda led his party into a general election in December, the cracks that had always existed within the party between factions had grown into full-blown gorges.

“The DPJ effectively imploded as its disparities within the party became more evident,” said politics professor Jeff Kingston at Temple University in Tokyo. Mr. Noda’s leadership failed to bring together the amalgamation of lawmakers who gathered under the DPJ flag with the single goal of taking control of power.

The party’s inability to make important policy decisions such as free trade and tax increases ultimately led to its demise, as the rejuvenated Mr. Abe repositioned his party as the “responsible party”—as opposed to the amateurs in the opposition camp.

Not yet satisfied with his December landslide victory, Mr. Abe is aiming to decimate the DPJ’s current dominance in the less powerful, but nonetheless important upper chamber in two weeks.

Because most bills must be approved by both chambers, the LDP-New Komeito’s projected majority win in the upper house is needed for a smooth enactment of bills. Opposition parties have used their control of the upper house to stall parliamentary procedures.

Mr. Abe has blamed the imbalance of power in the two chambers—commonly referred to as a “twisted parliament”—for everything from Japan’s slow economic recovery to the lack of progress in disaster reconstruction. And according to national polls, an overwhelming majority agree, as voters prepare to hammer in the last nail in the DPJ’s coffin, at least for what could be three election-free years.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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