Upper House setback for Abe

“We need to restore the people’s trust in the country and the government,” a weary and drawn-looking Abe told reporters.

Abe’s second-in-command resigned, and analysts said Abe would still face pressure to follow suit.

Voters, angry over a string of government scandals and gaffes and government bungling of pension records, stripped Abe’s coalition of its Upper House majority in his first big electoral test since taking office 10 months ago.

Abe’s coalition will not be ousted from government by a loss in the Upper House, since it has a huge majority in the more powerful lower chamber, but Kyodo news agency reported that he would reshuffle his cabinet, possibly in late August.

Without control of the Upper Chamber, where the main opposition Democratic Party will now have the most seats, laws will be hard to enact, threatening policy deadlock.

“We need to discuss issues closely with the Democratic Party in the Upper House and listen to them when necessary,” said Abe, after placing a few red rosettes marking the LDP’s scarce victories on a results board at his party’s headquarters.

Democratic Party leader Ichiro Ozawa failed to put in a public appearance, electing to rest after a tough campaign schedule.

With three seats left to be decided, public broadcaster NHK said the LDP and its partner, New Komeito, had won 44 seats compared to 59 for the Democrats.

The coalition needed 64 to keep their majority in the Upper House, where half of the 242 seats were up for grabs.

The LDP alone was certain to win fewer than 40 seats, NHK said, worse than the loss in 1998 that forced Ryutaro Hashimoto to resign as Prime Minister.

The party’s No 2 and its de facto campaign manager, Hidenao Nakagawa, resigned as secretary-general to take the blame for the abysmal showing.

Critics say Abe, who pledged to boost Japan’s security profile, rewrite its pacifist constitution and nurture patriotism in schools, was out of touch with voters.

The run-up to the election was dominated by a row over mishandled pension contributions, political scandals

Pension fiasco

Voters have been outraged by the government’s mishandling of millions of pension records that could short-change retirees. The Social Insurance Agency, which manages the pension system, has admitted that it failed to keep track of 50 million premium payments.

Consumption tax

The touchy topic received renewed attention after Abe stated during the campaign that he had never said the government would not raise the consumption tax. Abe had previously said the government would examine whether to tweak the tax rate.

Political corruption

• A number of ministers have been linked to financial scandals. Abe’s administrative reform minister resigned in December after acknowledging that a group of political supporters had filed “inappropriate” financial statements.

• In May, the farm minister killed himself after being implicated in a series of political funding scandals.

• In the latest scandal to hit Abe’s cabinet, media reports said the new farm minister, Norihiko Akagi, had booked millions of yen in expenses for offices not in use at the homes of his and his wife’s parents.

Shinzo Abe

• Born in 1954 and a third-generation politician, Abe is Japan’s first prime minister born after World War II. He has made revising the US-drafted post-war pacifist constitution and boosting Japan’s security profile key plank.

• His grandfather, Nobusuke Kishi, was a wartime cabinet minister who was imprisoned after the war but never put on trial. He served as prime minister from 1957 to 1960 and had a strong influence on the young Abe.

• The soft-spoken Abe is known for his stylish clothes and a sweet tooth.