Japan business lobby says Abe should keep job

TOKYO, July 30 (Reuters) The head of Japan's most powerful business lobby said he wants Prime Minister Shinzo Abe to stay on in his post despite a crushing defeat for his ruling camp in an upper house election.

Fujio Mitarai, chairman of the Japan Business Federation (Keidanren), told a news conference that Abe's policies, which include economic reforms, were not wrong but he would need to reshuffle his cabinet.

''The prime minister must create a new and strong cabinet as quickly as possible to restore trust,'' Mitarai said.

Voters outraged at a string of government scandals and gaffes and government bungling of pension records stripped Abe's coalition of its upper house majority yesterday in his first big electoral test since taking office 10 months ago.

Abe, who has pledged to boost Japan's global security profile, rewrite its pacifist constitution and ensure growth while pursuing economic reforms, reiterated today his intention to stay on as premier.

Mitarai, who is also chairman of camera and copier maker Canon Inc, warned against a possible dissolution of the lower house and a general election because it could cause political uncertainty.

REUTERS PD BST1503