After election loss, Japan party names new leader

TOKYO (AP) — Japan's ousted ruling party named a new chief Tuesday, a day before parliament was to install a fresh government led by former Prime Minister Shinzo Abe and the conservative party that governed the nation for most of the post-World War II era.

Banri Kaieda, a former trade minister, vowed to keep the left-leaning Democratic Party of Japan from collapsing after its stinging defeat in nationwide elections Dec. 16 that were handily won by Abe and his Liberal Democratic Party. Kaieda also said the party must continue to fight the conservatives.

Abe, who led Japan from 2006-2007, was to be formally installed as prime minister on Wednesday.

The LDP surged back into power after a three-year hiatus on a wave of voter discontent over the way the Democratic party has handled Japan's sagging economy, tax reforms and the nuclear crisis touched off by last year's devastating earthquake and tsunami.

Abe has promised to make the economy his top priority and is expected to push for a 2 percent inflation target designed to fight a problem that was until recently relatively unique in the world — deflation, or continually dropping prices, which deadens economic activity. The Japanese economy has been stuck in deflation for two decades.

Besides generous promises to boost public-works spending — by as much as 10 trillion yen ($119 billion), according to party officials — Abe is pressuring the central bank to work more closely with the government to reach the inflation target.

Abe has also stressed his desire to make Japan a bigger player on the world stage, a stance that has resonated with many voters who are concerned that their nation is increasingly taking a back seat both economically and diplomatically to China. Abe has vowed to stand up to Beijing over an ongoing territorial dispute and strengthen Tokyo's security alliance with Washington.

He has acknowledged, however, that the road ahead for Japan will be bumpy.

The LDP governed Japan for decades after it was founded in 1955, but has been the top opposition party since 2009 elections won by the Democrats. Before it was ousted, the LDP was hobbled by scandals and its own problems getting key legislation through a divided parliament.