Where will Abe be leading Japan?

We look at the national and regional implications of the electoral win of Japan's opposition Liberal Democratic Party.

Japanese voters have handed a landslide victory to the main opposition party, the Liberal Democratic Party (LDP).

Its leader, Shinzo Abe, set for a second stint as prime minister, has promised to revive Japan's stagnant economy and stand up to an increasingly assertive China.

"I don't think so much that the LDP won, it is more that the Democratic Party of Japan, the current ruling party, lost heavily." - Okubo Takuji, the chief economist at Japan Macro Advisors

Analysts say the election result highlights a growing right-wing sentiment in Japan, and risks worsening the already-tense relationship between China and Japan.

The two Asian countries, which have the world's second- and third-largest economies, are locked in a territorial dispute over a group of uninhabited islands.

"The Senkaku islands are Japan's inherent territory. Japan owns and controls the islands under international law. There is no room for negotiation on this point," Abe said on Monday.

So, in which direction is Japan's new government likely to steer the country?

Japan's Liberal Democratic Party (LDP) has ruled Japan for most of the post war period and it was their policies which created the bubble economy through the inflation of land prices in the Tokyo metropolitan area. As the bubble economy collapsed the (LDP) failed to recognize the needed solutions to ensure Japan's economic recovery.  For more than 2 decades the Japanese economy has failed to recover even half of its pre-bubble  value.

While economic stimulus is one of the necessary measures for recovery it isn't the only one. Especially for public works projects which benefit no one but the politicians who proposed them  and the construction companies awarded the contracts.

The (LDP) is also responsible for the polices regulating Japan's nuclear energy industry which following the melt down at Fukushima was completely inadequate. As those tasked with oversight and regulation were completely beholden to them.