Since shortly after WWII Japan has been a single party nation, totally dominated by Liberal Democratic Party (LDP). If the polls are right, this tradition will change this week in a very big way.
Just days before the election, polls continue to support the widely held belief that the Liberal Democratic Party (LDP) of Japanese Prime Minister Taro Aso will experience a crushing defeat in Sunday's vote for the lower house of the country's parliament.
One major late-week poll indicated at least twice as many voters would cast ballots for the Democratic Party of Japan, led by the country's likely next prime minister, Yukio Hatoyama.
The 2/3rd percentage is extremely important. If the DPJ captures 320 seats they can enact any legislation even if the Upper House, which is still divided, rejects it. Some projections say they will reach that goal.
The first question is, who is this Yukio Hatoyama?
The 177-centimeter-tall Hatoyama, 62, conjures up an image of silk stockings and silver spoons among the Japanese public. He is a scion of the country's wealthiest and most politically influential family, which has been nicknamed "Japan's Kennedys" by local media.
Hatoyama is a fourth-generation politician. His paternal great-grandfather Kazuo was speaker of the House of Representatives of Japan's Diet (parliament) from 1896 to 1897 in the Meiji era. Subsequently, Kazuo also served as vice minister of foreign affairs and as president of Waseda University, one of Japan's top universities.
Yukio's paternal grandfather Ichiro was three times prime minister between 1954 and 1956, and a founder and the first president of the ruling LDP. In 1951, he restored diplomatic ties with the Soviet Union and enabled Japan to become a United Nations member, his earnest political ambition before retirement.
Hatoyama's mother Yasuko, 86, is called "Godmother" in Japan's political circles, as she has provided significant sums of money inherited from her father Shojiro Ishibashi to help her two sons pursue their political ambitions, especially when they created the DPJ in 1996 by donating several billions of yen. Younger brother Kunio subsequently returned to the LDP as he felt the Democrats had moved too far left from its centrist roots, while Yukio remained a major figure in the DPJ.
To put this into perspective, the current Prime Minister is related to seven former Prime Ministers.
Given this extremely long heritage of being political insiders, it seems hard to believe that anything significant will change by a Hatoyama election. Looks can be deceiving.
The Democratic Party leader, Yukio Hatoyama, signaled some of his party's planned changes in international economic policy in a commentary Thursday in The New York Times. Hatoyama denounced what he called "market fundamentalism in a U.S.-led movement that is more usually called globalization."
Hatoyama argued that globalization ignores human dignity, and said his administration would work on people-oriented policies that "take greater account of nature and the environment, that rebuild welfare and medical systems, that provide better education and child-rearing support, and that address wealth disparities."
If Hatoyama is good to his word, no longer will Japan Inc. dominate political and economic policy in Japan.
Besides a more hard-line change on Japan's policies towards American military bases, we should also expect less Japanese support for America's Afghanistan mission.
It's Japan's economic policy that appears to be the most likely to change in reflection to America's interests.
With the era of US unilateralism ending and worries about the dollar’s future role growing, Japan should also work towards regional currency union and political integration in an “East Asian Community”, Mr Hatoyama wrote in an essay published Monday in the Japanese magazine Voice...
“As a result of the failure of the Iraq war and the financial crisis, the era of the US-led globalism is coming to an end and …we are moving away from a unipolar world led by the US towards an era of multipolarity,” the DPJ leader said, adding that fears about China's military rise were a big factor in “accelerating regional integration”.
These are radical statements coming from a future leader of Japan. Not just doubt's about the dollar's role in the world economy, but suggestions for its replacement are earth-shaking.
A more immediate economic factor effecting Japan's move away from America is the end of the Yen Carry Trade. The Yen Carry Trade involves large financial institutions borrowing in cheap Yen at artificially low interest rates, and then buying higher-yielding dollar-based assets. It also led to an endless supply of easy credit in America.
This was a very easy way for banks to make money during the 1990's and early 2000's. Trillions and trillions of Yen were traded this way. However, that is now coming to an end.
On Wednesday, banks seeking dollars had to pay 0.37188%, which is the three-month dollar Libor, while yen borrowers needed to pay 0.38813%. It is the first time since May 1993 that the rates have flipped.
Many people forget that before China, Japan was our top creditor, and remains our second-largest creditor. A significant shift away by Japan could have radical effects on economic conditions in America.