Do Japan's voters have seven-year itch?

By Linda Sieg

TOKYO (Reuters): Japan's prime minister, his popularity in tatters, leads his ruling party to a stunning election defeat and sets the stage for a new reformist coalition.

That drastic scenario, however, played out seven years ago.

Despite some striking similarities to the plight of incumbent Prime Minister Yoshiro Mori, whose support ratings have tumbled after his emotive comments this month echoing wartime ideology, few pundits expect a rerun of the 1993 drama.

Hope, however, springs eternal among proponents of change in Japan's byzantine political system in which the Liberal Democratic Party (LDP) has held power almost uninterrupted since the war. And some warn it would be risky to rule out the unexpected.

"Until the 'divine nation' comments, I would have said it was almost mathematically impossible for the opposition to get enough seats to put together a ruling coalition," said one Western political analyst. "But with the decline in Mori's support and some signs of panic in the LDP, it just might not be impossible."

Mori, a policy novice known chosen in April by LDP power- brokers while his predecessor, the late Keizo Obuchi, lay ill with a stroke, has seen his popularity slashed after he said Japan was a "divine nation with the emperor at its core."

The comments were an uneasy reminder of the state Shinto religious ideology which was used to justify Japan's aggression in Asia before and during World War II.

The storm stirred up by the remarks has just about halved public support for Mori's cabinet, dragging his popularity to levels unseen by any prime minister facing an election.

Mori is expected to dissolve parliament on Friday and to call a Lower House election, which must be held by October anyway, for June 25. But no official decision has yet been made.

A survey published on Tuesday by the liberal Asahi Shimbun said Mori's support had plunged to 19 percent from the 41 percent seen shortly after he took office, while the disapproval rating for the cabinet soared to 62 percent from 26 percent.

But with the public still worried about Japan's fragile recovery from its worst recession in 50 years, nearly three- quarters of those surveyed said they would give precedence to economic policies when deciding their votes.

"Past experience shows that non-support for the cabinet does not translate directly into votes against the ruling party," said Hiroshi Kuribayashi, a political analyst at Barclays Capital.

"Of course, the antipathy to the cabinet is a minus, people want the economy to recover and many think that only the LDP can accomplish that."

Most surveys, including Asahi's, have shown some erosion of the LDP support but the figures still hover around one-third.

The main opposition Democrats, who want to make criticism of the ruling bloc's free-spending, debt-defying economic policies a key campaign plank, are managing only about 10 percent.

For now, many analysts expect the ruling coalition to see their massive 335-seat Lower House majority shrink but still scrape by with more than half of the seats up for grabs. A poor performance by the LDP would spell the end for Mori as premier.

Recent reforms mean the 500 seats in the Lower House will be reduced to 480, of which 300 are single-seat districts where the LDP's vote-gathering machine still has serious clout and 180 are determined by proportional representation.

"An anti-LDP government is hilariously remote," said Merrill Lynch chief economist Jesper Koll.

But the "floating vote" -- ballots to be cast by voters with no party affiliation -- could upset calculations.

"The popularity of the leader has nothing to do with the base support for the LDP, but there is a lukewarm middle-class that usually votes for the LDP," said the Western analyst.

"That non-core vote could hurt the LDP."

If the ruling bloc does fail to keep its majority, two post- election scenarios could yield an anti-LDP government.

In one case, former LDP secretary-general Koichi Kato, a staunch critic of the coalition with the Buddhist-backed New Komeito and a proponent of fiscal reform, could take his 60 faction members out of the LDP and join the Democrats in forming a new government.

Many, however, doubt that Kato is inclined to mimic one-time ruling party heavyweight Ichiro Ozawa, whose defection from the LDP ahead of the 1993 election was more critical than then-prime minister Kiichi Miyazawa's sinking popularity in setting the stage for an anti-LDP coalition to take power.

That reformist coalition lasted less than a year and the LDP regained power in an odd coalition with the Socialists. Ozawa, head of the tiny opposition Liberals, is now a political orphan.

Barring a defection by Kato, a coalition linking the Democrats with other anti-LDP parties such as the Communists would be needed to forge a new majority government, an outcome all but certain to spell policy confusion on almost every front.