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The Japan Business Federation (Nippon Keidanren) will officially back the Liberal Democratic Party in the Sept. 11 Lower House election as a show of support for Prime Minister Junichiro Koizumi’s reforms, sources said Wednesday.

Keidanren Chairman Hiroshi Okuda is expected to announce the powerful business lobby’s support for the LDP at a news conference or through a statement around Aug. 30, when campaigning kicks off, the sources said.

Keidanren will call on its member companies to help with LDP campaigning, and firms are expected to respond by increasing political donations to the ruling party, they said.

According to Keidanren officials, it will be the first time for the business organization to openly support the LDP in a general election since a Lower House election July 1993, when the LDP lost its hold on power for the first time since its founding in 1955.

The LDP has made postal privatization its top issue in the election, telling voters it must stay in power for reforms to continue.

According to Keidanren sources, top officials in the business lobby felt the group needed to take a position as the election is squaring off over policy issues.

“Postal privatization is absolutely necessary if we want to see a trend of (power shifting) from the public sector to the private sector,” one senior Keidanren official said in explaining why the body is siding with the LDP.

Individual firms will decide what sort of campaign assistance they will offer the LDP, but sources said companies might increase donations and urge their employees to attend gatherings to see LDP candidates stumping.

According to political fund reports for 2003, the LDP received about 2.6 billion yen in donations from corporations, of which Keidanren members gave nearly 2 billion yen.

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