Japanese economics minister Kaoru Yosano and former defence minister Yuriko Koike lined up on Thursday to challenge frontrunner Taro Aso in the race to become prime minister, setting up a clash over economic policy as Japan teeters on the edge of recession.
The winner likely will face an early general election - possibly as soon as November - Kyodo news agency said, as the main ruling Liberal Democratic Party (LDP) tries to capitalise on an anticipated wave of support for the new leader.
Yosano has pushed for the Japanese government to curb its hugh public debt, while Aso has said that increasing state spending to stimulate growth is more important in difficult economic times. Koike's candidacy is backed by ruling party heavyweight Hidenao Nakagawa, who argues that Japan should cut wasteful spending and boost economic growth through structural reforms before raising taxes to tackle its tattered finances.
Outspoken Aso, a 67-year-old former Olympic sharpshooter and a fan of comic books, is the top pick in voter polls to replace Prime Minister Yasuo Fukuda, who quit suddenly this week, but some in the ruling LDP worry he could derail fiscal reform.
"A leadership election is a chance for the LDP to show the people what it is thinking, what its stance is," Yosano said in a television interview. "To have several candidates stand and debate openly is the honest thing for the party to do."
A veteran conservative politician, Yosano, 70, has said in the past that Japan's sales tax rate needed to be doubled from 5 percent to at least 10 percent by around 2015, as a wave of retirements among baby boomers threatens to blow out pension and welfare costs.
Whoever becomes LDP leader in the September 22 vote will be Japan's next prime minister by virtue of the party's control of parliament's lower house, which is expected to convene shortly after the LDP presidential race to elect a successor to the unpopular Fukuda.
Yuriko Koike, a former television announcer who served a brief, turbulent term as Japan's first female defence minister last year, gained on Thursday the necessary 20 party backers to stand, Kyodo news agency said, citing another lawmaker.
Some analysts say she does not expect to win the leadership, but is positioning herself for another bid after Aso. Former transport minister Nobuteru Ishihara, an advocate of sweeping reform of the bureaucracy and floated as another possible contender, said he had different views from Aso and it would be bad if no one challenged him for the leadership.
"You need 20 backers to become a candidate," Ishihara told reporters. "I have more than ten, but I still need about another five," he added. NHK said he would announce his intentions on Friday. Ishihara, son of nationalist Tokyo governor Shintaro, is also seen as favouring fiscal control over spending to boost the economy.
Some analysts said the plethora of candidates made it more likely Aso would win the election. "It splits the reformist vote and for people who just don't like Aso, it also splits their vote," said Jeff Kingston, professor of Asian studies at Temple University's Tokyo campus. Attention is focused on Aso's economic policies, after Japan's economy shrank in the second quarter, but he has been best known in the past for tough talk towards Beijing and support for a bolder security role for Japan.
Comments apparently defending Japan's 1910-1945 occupation of the Korean peninsula sparked anger in South Korea, where many suffered under Japan's military aggression. Aso's popularity may be a deciding factor, however, as the new leader will face an election within a year.
Under Fukuda, the government's ratings sank to low levels and some analysts say a bounce under a new leader could lead to an early poll to capitalise on this. If Aso does miss out on his fourth shot at the leadership, it would be a rerun of last year. He was the initial favourite to replace Prime Minister Shinzo Abe, who also quit suddenly, but his party picked Fukuda instead.
Public opinion polls paint a confusing picture for the election outlook. An Asahi newspaper poll showed voters favouring the LDP over the main opposition Democratic Party, but more said they would vote for the Democrats if an election was held now.