Japan PM faces powerful challenger in leadership vote that could give country new leader

TOKYO (AP) — Japan's prime minister faces off against a powerful political veteran in a ruling party vote Tuesday that could give the country its third premier in a year.

Ichiro Ozawa, an old-school power-broker who has been in parliament for 40 years, is seeking to oust Prime Minister Naoto Kan as head of the Democratic Party. Because of the party's majority in the lower house of parliament, its leader will almost certainly become prime minister.

Media reports say the outcome was too close to predict, with as many as 30 party members still undecided ahead of Tuesday afternoon's vote. The party's 411 members of parliament will cast ballots that will largely decide the race. Rank-and-file party members finished voting Saturday, but their ballots count for only a third of the total.

If Ozawa wins, it would be a stunning comeback for the party kingpin after having resigned as the party's No. 2 in June amid a funding scandal that still hangs over his head. He could be indicted as early as next month over those allegations — although he claims no wrongdoing.

Ozawa has signaled he's staking everything on the vote, saying Tuesday the election "wraps up my political life."

Kan, a plainspoken fiscal disciplinarian who has been in office just three months, is far more popular among the public. Public opinion polls show voters prefer him by a 4-to-1 margin.

But Ozawa has strong support from his parliamentary faction, including many who feel obligated to him for his role in starting their political careers. A master strategist, he's credited with orchestrating the Democrats' historic victory last August that toppled the long-ruling conservative Liberal Democratic Party — the party he started out in before breaking away in 1993.

Kan, who also has a loyal core behind him, has faced criticism for the party's loss in July's upper house elections — particularly his ill-timed proposal before the vote to raise Japan's 5 percent sales tax to as high as 10 percent.

The leadership dispute has distracted Japan at a critical time, with the yen's spike to a 15-year high hurting its car and electronics exporters and its economy — recently passed up by China's — stagnating.

Also, Tokyo has gotten embroiled in a diplomatic spat with China after a Chinese fishing trawler last week collided with Japanese patrol boats near some disputed islands off Taiwan. China has harshly criticized Japan for arresting the captain and keeping him in custody, saying the incident could damage ties between the two Asian giants.

While campaigning around the country over the past week, both Kan and Ozawa have stressed the need to revive Japan's economy.

Ozawa has proposed stimulus spending as much as 2 trillion yen ($23.8 billion) in public works and other projects, and intervening in the currency market to stem the yen's surge. He's criticized Kan for lacking leadership and falling prey to pressure from Finance Ministry bureaucrats to raise the sales tax.

A former finance minister, Kan has called for job creation but has warned that Japan needs to keep its fiscal house in order and says he will cut wasteful spending.

He's also said he wants to break free from "the old politics of money" — a veiled attack on Ozawa — and make government more transparent.

An enigmatic figure, Ozawa has championed reforms, such as deregulation, giving more authority to regional governments and reining in Japan's powerful bureaucrats. His 1993 book, "Blueprint for a New Japan," argued that Japan needed to reform its political system and take a more active role in international affairs — garnering significant attention in Washington.

But he's also seen by the public as a back-room dealer and is known as "the destroyer" for his power to break up political parties. A bit of a loose cannon, Ozawa recently called Americans "simple-minded," and late last year said Christianity is an "exclusive" religion that is weighing down Western society.

Both men have said if they lose, they will work to support the other, but some analysts have speculated that the leadership battle could split the party. Some say that if Ozawa loses he could break away with his faction and perhaps even join forces with the LDP.