Japanese PM wins party vote, will stay in power

Japanese Prime Minister Naoto Kan was re-elected president of the ruling Democratic Party on Tuesday, surviving a stiff challenge from a veteran powerbroker and sparing Japan another change in leadership.

Kan, in office just three months, defeated Ichiro Ozawa by an unexpectedly wide margin, 721-491. Parliamentary party members accounted for two-thirds of the votes, while rank-and-file members around the country made up the remaining third.

A party heavyweight, Ozawa quit as the party's No. 2 in June, amid a political funding scandal.

The leadership tussle has distracted Japan at a time when it desperately needs to confront a host of problems, from a sluggish economy and a surging yen - which Tuesday hit a new 15-year high against the dollar - to an escalating spat withChina over a collision near disputed islands. Had Ozawa won, he would've been Japan's third prime minister in a year.

A fiscal disciplinarian who has urgently called for Japan to create more jobs to revive the economy, Kan is far more popular among the general public than Ozawa, who is widely viewed as a backroom kingmaker with a scandal-tainted image. Ozawa could be indicted as early as next month for allegations of political finance irregularities.

Famous for standing up to Japan's bureaucrats when he exposed a government cover-up of HIV-tainted blood in the mid-1990s, Kan has pledged to make politics more transparent and accountable. Surveys show that voters prefer Kan by a margin of 4-to-1.

Ozawa, a fixture in Japanese politics for 40 years, mounted a strong challenge, tapping into his deep support base within the party. A master strategist, Ozawa is widely credited with engineering the Democrats' landslide victory a year ago, unseating the conservative Liberal Democratic Party that ruled Japan for most of the post-World War II era.

While Ozawa said he would back Kan if he loses, some analysts have speculated that Ozawa may try to break away from the Democrats to form his own party or even join with the LDP.