The opposition conservative Liberal Democratic Party (LDP) of Shinzo Abe has won the Japanese election, exit polls predict.
The LDP, which enjoyed almost 50 years of unbroken rule until 2009, is projected to have an overall majority in the new parliament.
Mr Abe has already served a Japan’s Prime Minister between 2006 and 2007.
He campaigned on a pledge to end 20 years of economic stagnation and to direct a more assertive foreign policy at a time of tensions with China.
Exit polls by television broadcasters showed the LDP winning nearly 300 seats in parliament’s powerful 480-member lower house, while its ally, the small New Komeito party, looked set to win about 30 seats.
That would give the two parties the two-thirds majority needed to over-rule parliament’s upper house, where they lack a majority and which can block bills, which would help to break a policy deadlock that has plagued the world’s third biggest economy since 2007.
“We need to overcome the crisis Japan is undergoing. We have promised to pull Japan out of deflation and correct a strong yen. The situation is severe, but we need to do this,” Abe said on live TV. “The same goes for national security and diplomacy.”
Parliament is expected to vote Abe in as prime minister on December 26.
Analysts said that while markets had already pushed the yen lower and share prices higher in anticipation of an LDP victory, stocks could rise further and the yen weaken if the “super majority” was confirmed.
Top executives of the LDP and the New Komeito confirmed that they would form a coalition. “The basis, of course, is a coalition between the LDP and the New Komeito. But if there’s room to cooperate with Japan Restoration Party, we need to do so,” said LDP Secretary-General Shigeru Ishiba, referring to a new, right-leaning party that was set to pick up about 46 seats.
“I think there is room to do this in the area of national defence,” he said, referring to cooperation with the Japan Restoration Party. The New Komeito is more moderate than the LDP on security issues.
Exit polls showed Prime Minister Yoshihiko Noda’s Democratic Party of Japan (DPJ) winning only 65 seats, just over a fifth of its tally in 2009.
The DPJ, which swept to power in 2009 promising to pay more heed to consumers than companies and reduce bureaucrats’ control over policymaking, was hit by defections just before the vote.
Party executive Kohei Otsuka told NHK that Noda would likely have to quit the party leadership over the defeat, in which several party heavyweights lost their seats.
Many voters had said the DPJ failed to meet election pledges as it struggled to govern and cope with last year’s huge earthquake, tsunami and nuclear disaster, and then pushed through an unpopular sales tax increase with LDP help.
Voter distaste for both major parties has spawned a clutch of new parties including the Japan Restoration Party, founded by popular Osaka Mayor Toru Hashimoto.
With Japan stuck in a two-decade slump and receding behind China as the region’s most important economic player, people appear to be turning back to the LDP, which led Japan for so many decades.
The LDP’s vows to build a stronger, more assertive country to answer increasing pressure from China and threats of North Korean rocket launches also resonated with voters. Abe has repeatedly said he will protect Japan’s “territory and beautiful seas” amid a territorial dispute with China over some uninhabited islands in the East China Sea.
“I feel like the LDP will protect Japan and restore some national pride,” Momoko Mihara, 31, said after voting for the Liberal Democrats in the western Tokyo suburb of Fuchu.