Japan's LDP set for big win in Sunday election: polls

By Linda Sieg

TOKYO (Reuters) - Japan's conservative Liberal Democratic Party (LDP) is on track for a stunning victory in Sunday's election, returning to power with hawkish former Prime Minister Shinzo Abe at the helm, and possibly ending Japan's political gridlock.

Opinion polls by the Asahi, Yomiuri and Nikkei newspapers on Friday forecast that the LDP was headed for a hefty majority in the powerful, 480-seat lower house of parliament.

The LDP and its smaller ally, the New Komeito party, could even gain the two-thirds majority needed to break through a policy deadlock that has plagued the world's third biggest economy since 2007.

An LDP win on Sunday would usher in a government committed to a tough stance in a territorial row with China, a pro-nuclear power energy policy despite last year's Fukushima disaster and a radical recipe of hyper-easy monetary policy and big fiscal spending to end persistent deflation and tame a strong yen.

Japanese business sentiment worsened for a second straight quarter in the three months to December and will barely improve next year, a central bank survey showed on Friday, strengthening the case for the Bank of Japan to take bolder action to support an economy already in recession.

Between 30 percent and nearly 50 percent of voters were undecided with just days to go, the surveys showed. Experts said that was unlikely to affect the general trend, although turnout will probably fall below the 69.28 percent seen in the last lower house election in 2009.

DEBACLE FOR PM'S PARTY

Contributing to the indecision is a fragmentation of the political landscape that has resulted in a dozen parties, some of them just weeks old, contesting the election, and confusion over policy differences between the main contenders.