TOKYO — Battered by voter backlash over the prospect of higher sales taxes, the ruling Democratic party suffered a heavy defeat in parliamentary elections Sunday, exit polls showed, dealing a blow that could hinder the government’s ability to control soaring debt.
The projected losses were worse than expected and will make it difficult for Prime Minister Naoto Kan’s young government to tackle problems confronting the world’s second-largest economy: reining in its bulging deficit, reviving growth and supporting a rapidly aging population.
The projected results indicate that the ruling coalition lost its 122-seat majority in parliament’s upper house.
The election won’t directly affect the Democrats’ grip on power, because they control the more powerful lower house of parliament. But it does raise the prospect of gridlock.
“It’s bad news for Kan and the party, and it’s really bad news for the nation because it means there isn’t going to be resolute action on all the festering problems facing the government,” said Jeff Kingston, director of Asian studies at Temple University in Japan. “And that’s got global repercussions.”
A fiscal hawk and social progressive, Kan warned after taking office last month that unless Japan took dramatic steps, it could face a Greece-like fiscal crisis — a comparison experts say is exaggerated.
His proposal to possibly double the 5 percent sales tax in coming years hurt his party’s chances in the elections, where half of the upper house’s 242 seats were up for grabs.
Kan acknowledged that the proposal led to the losses, but he declared that he won’t quit.
“I’ll make a fresh start and continue on to carry out a responsible political management,” he said.
