Prime Minister Junichiro Koizumi won a striking re-election victory by focusing on the single issue of domestic reform in a profoundly misleading way. He was able to campaign as the "Lionheart" radical who would modernize Japan by privatizing the massive postal bank, and skirted the way that he has far more fundamentally changed Japan's foreign policy.

Koizumi's opponents tried to make his newly assertive and pro-American policies into an election issue, but failed. They promised to withdraw the Japanese troops that Koizumi had sent to Iraq (in a strictly non-combat role), and to repair relations with China and South Korea, and also attacked Koizumi for his regular visits to the Yasukuni shrine for Japan's war dead, which included some World War II military figures accused of war crimes; the visits have also provoked angry comments from Chinese and Korean officials.

"A foreign policy that dismisses Asia and places supreme importance on the United States, an implacable line on visits to the controversial Yasukuni Shrine, a zeal to amend Japan's pacifist post-war Constitution, all these have earned it the distrust of its neighbors," commented the South Korean daily Chosun Ilbo in an editorial Monday.

Koizumi, who has also begun picking away at the pacifist constitution imposed on Japan after World War II, has promoted Japanese technological cooperation with the U.S. anti-missile defense program and shifted the main focus of the Japanese navy from its Cold War deployments near Soviet harbors to the vital sea lanes that skirt Taiwan and China.

In February, Japan for the first time declared that it shared "a common security concern" with the United States over stability in the Taiwan Straits, and also called jointly with the United States for more transparency in China's military planning, provoking an angry retort from China's foreign ministry.

Last week, the Japanese navy reported that 56 Chinese warships, including a modern Russian-built destroyer, were patrolling in an area of the East China Sea that Japan claims lies within its exclusive economic zone. This area, containing what China calls the Chunxiao gas field, is disputed. Japan granted drilling rights to a Japanese company in July and formally protested to China last month on reports of Chinese drilling at Chunxiao.

Koizumi's decision to tighten Japan's strategic alliance with the United States and to block Chinese ambitions is the most important shift in Japanese foreign policy for a generation - but it played little part in the election. And this strategic course can now be expected to continue.

Koizumi led his Liberal Democratic Party from its old showing of 212 seats in the 480-seat lower house of parliament to 296 seats in the new one. This means he no longer needs the alliance with the New Kumeito party for a majority, but with the 31 seats of these allies, Koizumi's LDP now has the two-thirds majority to overrule the Upper House of the Diet.

This was a personal triumph for Koizumi, since he stamped his authority firmly on his party, expelling 37 rebels from the LDP, challenging them in their constituencies with hand-picked (and often glamorous female) "assassins."

Koizumi has now shifted the party away from its traditional dependence on the rural vote, the agricultural cooperatives and the construction industry, and his insistence on privatizing the Post Bank as his emblematic reform also weakens the long-standing power of rural postmasters.

But there are three main problems with Koizumi as the reformer that Japan needs, after more than a decade of economic stagnation, and a monstrous level of public debt that is now much higher than Japan's $4 trillion annual gross domestic product.

The first is that his privatization of the Post Bank, with its $3 trillion in assets for investment, sounds more radical than it really is. Koizumi's plan is for a partial privatization, phased in slowly, whose impact on modernizing Japan's financial sector is going to be limited.

The second problem is that Koizumi's victory has, at least for the moment, destroyed the Democratic Party of Japan, the strongest force in the country for the much-bolder reforms the country probably needs. The DPJ fell from 177 seats to 113, and its leader Katsuya Okada resigned Sunday night in recognition of his defeat, leaving no obvious replacement.

The DPJ is a coalition of former LDP rebels and reformers, the old Socialist party and some new faces from urban Japan, long under-represented in a political system that gave much more weight to rural voters.

Under Okada's leadership, they campaigned on a bold platform of reform, starting with Japan's pension system, which is heading for fiscal disaster as the demographic time bomb of too many retirees being financed by too few younger workers starts to hit.

The DPJ also wanted to tackle Japans creaking and costly health system, which will also be hit by the demographic tidal wave of the retirees. The DPJ campaigned on the need to reform the welfare system to encourage more babies through child allowances, and tackling the country's endemic budget deficits with higher consumption taxes.

The DPJ tabled a realistic agenda of reform for the problems that Japan is facing, but they were unable to get much traction during the campaign, as Koizumi cleverly seized the reformist mantle for himself.

The third problem is that Koizumi is pledged to step down within a year, and that by far the most important policy change Koizumi has engineered - the newly assertive and much more openly pro-American and anti-Chinese foreign policy - may or may not survive when Koizumi goes.

One leading contender, Shinzo Abe, acting head of the LDP machine, would continue this course. His main rival, former Cabinet secretary Yasuo Fukuda, would reverse it and seek much close relations with China.

Maybe the moment of Koizumi's retirement and the campaign for the succession will see Japan embark on the serious debate that has yet to take place on its foreign policy stance, and on Japan's response to the stunning economic growth of China.

But for the moment, dazzled by Koizumi's political skills, the Japanese electorate has largely ducked what could be a defining issue for Japan's future in its unstable and fast-changing neighborhood.

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