Koizumi wins vote over reforms

Prime Minister Junichiro Koizumi scored a slim victory on Tuesday when parliament's lower house approved bills to privatise Japan's postal system - including the world's biggest bank - despite a ruling party revolt.
Koizumi had said a failure to pass the bills, the centrepiece of his reform agenda, would be tantamount to a no-confidence vote, a tacit threat to call a snap election if the legislation was rejected.
"It was a perilous fight," Koizumi told reporters after the bills were approved by a margin of a mere five votes. "I am relieved."
Japanese media said close to 40 out of the 250 lower house members of Koizumi's Liberal Democratic Party (LDP) defied party policy to vote against the bills, while several others abstained, bringing the final tally to 233 votes in support of the bills and 228 against them.
The legislation was also backed by the LDP's junior coalition partner the New Komeito, which has 34 seats in the powerful 480-seat lower chamber.
The bills will next be submitted to the upper house, whose approval is needed for them to be enacted. The ruling parties have a slimmer majority in the upper house. "The opposition was more numerous than I expected," Koizumi said. "It is true that we have climbed one tall mountain but there is another big mountain to climb."
Privatisation of the postal system, which has assets of over $3 trillion including the world's largest bank, has long been a taboo within the LDP, as many lawmakers have used public works projects funded by postal savings to woo support.
Many LDP lawmakers also depend on local postmasters, who wield influence in rural areas, to turn out votes. Postmasters oppose privatisation because of fears they will lose their jobs.
Financial markets were surprised by the closeness of the vote. "The yen briefly got a little boost, but it seems to have reversed those gains after people saw the difference was just five votes," said Hideaki Furumaya, forex manager at Trust & Custody Services Bank.
The main opposition Democratic Party opposed the bills, which were revised in a bid to win over some LDP opponents, saying they call for only watered-down reforms and will not ensure complete privatisation.
Koizumi has been advocating the privatisation since well before he became prime minister in 2001 and has staked his political legacy on achieving it, saying Japan Post is a symbol of the inefficiency remaining in the public sector.