Japan's Tanigaki focus on Asia ties,tax in PM race

Tokyo, July 27: Finance Minister Sadakazu Tanigaki was set to publicly declare his candidacy today in the race to be Japan's next leader with a platform seen urging better ties with Asian countries and a sales tax rise to remedy public debt.

Tanigaki, a dark horse contender to succeed Prime Minister Junichiro Koizumi when he steps down in September, has already stated he would not visit Yasukuni Shrine -- seen as a symbol of Japanese militarism by China and South Korea -- if elected.

And today he said Japan should take the politically touchy step of raising the 5 percent sales tax to 10 per cent by around 2015 to rein in a public debt that is already the worst among advanced industrialised nations, Japanese media reported.

The 61-year-old Tanigaki, however, faces an uphill struggle against Chief Cabinet Secretary Shinzo Abe, a security hawk known for his tough stance towards North Korea and China.

Abe, 51, is way out in front in media surveys asking voters who they want to become the next premier. ''You have a pro forma race, but to all intents and purposes it's a done deal,'' said Jesper Koll, chief economist at Merrill Lynch in Tokyo.

Today morning, Tanigaki told his party faction that he would run, media reports said, and he was to hold a news conference later in the day.

Tanigaki -- who in a joking reference to his serious and stiff demeanour once said he wore ''tin underpants'' -- is highly respected as a bright and hardworking politician.

But he is seen lacking the popular appeal that the ruling Liberal Democratic Party (LDP) needs in its leader to win an election for parliament's upper house in mid-July 2007.

''He is the thinking man's candidate ... but this is an insiders' election selecting the person they think will give them the popular vote,'' Koll said.

The maverick Koizumi saved the LDP from an expected electoral drubbing after taking power in April 2001 on a platform promising to fix a stagnant economy and shake up the staid ruling party. Abe, a dapper political blue-blood, is widely seen as Koizumi's heir apparent, especially after his main rival former chief cabinet secretary Yasuo Fukuda -- an advocate of improving ties with the rest of Asia -- decided last Friday not to run.

ABE'S AMBIGUITY A survey by the Mainichi Shimbun newspaper published on Monday showed Abe garnering a 44 percent support rate compared with just 3 percent for Tanigaki and 7 percent for Foreign Minister Taro Aso, who has also said he intends to run.

Abe has been vague about when and by how much the sales tax should be increased, an ambiguity that analysts attribute to a reluctance to upset voters ahead of next year's poll.

''The voice of the people is to deal with this by cutting spending,'' Abe told a regular news conference today.

''The economy is a living thing so we will have to consider the situation at the time and decide on that basis.'' Japan's outstanding public debt is expected to rise to around 775 trillion yen (6,665 billion dollars) by the end of this fiscal year next March -- roughly 150 percent of gross domestic product.

Abe has also been ambiguous about whether he would visit Tokyo's Yasukuni shrine as prime minister, although he supports Koizumi's right to do so and last year went there himself on the emotive Aug.

15 anniversary of Japan's surrender in World War Two.

The topic is a tricky one domestically. Many Japanese business executives want the next prime minister to steer clear of Yasukuni to avoid hurting vital economic ties with China.

A Mainichi survey published on Thursday showed 54 per cent of voters oppose the next prime minister visiting Yasukuni.

But among LDP supporters alone, 48 perc ent backed the pilgrimages while 40 percent were opposed.

Abe was to set out later in the day for Iwate in northern Japan, where he will talk about his ''Second Chance'' policy aimed at ensuring that market-based reforms begun under Koizumi do not result in a society of permanent ''winners'' and ''losers''.

LDP members and lawmakers will elect its next leader on Sept. 20 and the victor is virtually assured assured of the premiership by virtue of the party's grip on parliament.

Reuters