TOKYO, Nov 1 (Reuters) - Japanese Prime Minister Fumio Kishida's ruling LDP defied expectations and held its strong majority in Sunday's parliamentary election, solidifying his position in a fractious party and allowing him to ramp up stimulus.
Kishida's conservative Liberal Democratic Party (LDP) emerged with fewer seats in the powerful lower house than it won in the last election in 2017. But the LDP maintained its single-party majority in a big victory for Kishida, who took power only a month ago.
The result was at odds with expectations and initial exit polls that suggested the LDP, hurt by perceptions it mishandled the coronavirus pandemic, would need to rely on its junior coalition party for a majority.
Kishida, a soft-spoken former banker who has struggled to shake off an image that he lacks charisma, is also likely to be emboldened by the win.
Kishida, who called the election soon after taking the top post, has hewed to traditional policies of the party's right wing, pushing to increase military spending, but has also promised to address wealth inequality, touting a "new capitalism" that has stoked concern among investors.
In the end, the LDP claimed 261 seats against the 276 it held before the election - an absolute stable majority that will give it control of parliamentary committees and ease passage of legislation, including key budget proposals.
Kishida's publicly stated goal had been for the coalition to keep a majority, at least 233 seats, of the 465 in the lower house - although that was widely seen as a lowball target, given the junior coalition partner Komeito had 29 seats before the election. Together the LDP and Komeito secured 293 seats.
"The overall trend is in favour of stability. The LDP cleared the hurdles it absolutely had to," said Tobias Harris, senior fellow at the Center for American Progress.
"We'll see a lot of stimulus," he said.
Japanese stocks cheered the victory, with the Nikkei up 2.38% soon after trade began.
A poorer showing would have heightened expectations that Kishida could follow predecessor Yoshihide Suga in becoming another short-term premier.
The party did take some notable hits, including the loss by its secretary general, Akira Amari, in his single-seat district, and a former economy minister and the leader of one the party's factions, Nobuteru Ishihara, who lost to an opposition candidate in a western Tokyo district.
EXTRA BUDGET TARGETED
Kishida said the administration would attempt to compile an extra budget this year, in what would be a tight schedule.
"I hope to pass through parliament an extra budget this year," he told reporters.
This would involve funding steps to support people hit by the pandemic such as those who lost jobs and students struggling to pay tuitions.
A big winner was the conservative Osaka-based Japan Innovation Party, projected to more than treble its seats and surpass Komeito as the third force in the lower house, after the opposition Constitutional Democratic Party of Japan.
The emergence of the Osaka party as a national force may complicate Kishida's pledge to roll back neoliberal economic policies.
The Innovation Party is "really sweeping the Osaka region. They've emerged as an important conservative bloc," said Yoichiro Sato, a professor of international relations at Ritsumeikan Asia Pacific University. "They are going to block Kishida's new capitalism idea of narrowing the rich-poor income gap."
The usually splintered opposition was united, with only one party - including the widely shunned Japanese Communist Party - facing off against the coalition in most districts.
Some voters - including Yoshihiko Suzuki, who voted for the main opposition candidate in his district and the Communists in proportional representation - hoped the poll might teach the LDP a lesson.
Suzuki, 68 and retired, said the LDP's years in power made it complacent and arrogant, underscored by a series of money and cronyism scandals.
"I hope this election comes as a wakeup call for them," he said. "If it does, the LDP will become a better party, considering the number of talented lawmakers they've got."
Reporting by Sakura Murakami, Elaine Lies, Irene Wang, Daniel Leussink, Kiyoshi Takenaka, Antoni Slodkowski, Leika Kihara and Yoshifumi Takemoto; Writing by David Dolan; Editing by William Mallard, David Dolan, Angus MacSwan and Lincoln Feast.