By Linda Sieg and Kiyoshi Takenaka
TOKYO (Reuters) - Japanese began voting on Sunday in an upper house election that could deliver Prime Minister Naoto Kan's government a major blow, stalling efforts to curb a huge public debt and putting the premier's job at risk.
Sagging support for the leading Democratic Party of Japan (DPJ), which surged to power for the first time last year, rebounded after Kan -- Japan's fifth leader in three years -- replaced his indecisive predecessor last month.
But ratings slipped again after Kan floated the long taboo topic of raising the sales tax to curb public debt and struggled to persuade voters he had a clear plan to fix Japan's woes.
"The Democrats haven't been able to implement their policies well enough," said Ikuhiro Harada, a 20-year-old student voting in Yokohama city near Tokyo, who opted for the main opposition Liberal Democratic Party (LDP).
Others admitted a sales tax rise was inevitable and said they were willing to give the Democrats a second chance despite months of indecisive leadership under Kan's predecessor, Yukio Hatoyama.
"I'm going to live on a pension, and more money going out of my wallet is not something I desire," said Asako Nishikawa, 60, who works for an insurance company and voted for the DPJ. "But I've got grandchildren to think about."
In an effort to soothe sales tax fears, Kan has stressed he would not hike the levy even "one yen" without seeking a mandate in the next lower house poll, which must be held by late 2013.
But he also argued that tough decisions were vital to avoid a Greek-style debt crisis, since Japan's public debt is already close to twice the size of the nearly $5 trillion economy.
MISSING THE TARGET?
"Japan itself must make sure it avoids collapse," Kan told a crowd of voters under a blazing sun in western Tokyo as he wrapped up his campaign on Saturday. "If state finances collapse, the social security system of ordinary people would suffer most."
The DPJ, which ousted its long-dominant rival last year with pledges to cut waste, prise control of policymaking from bureaucrats and focus spending on households to boost growth, will almost certainly run the government whatever the outcome of Sunday's vote because it controls the powerful lower house.
But the party needs a majority in the upper chamber to avoid policy deadlock and begin taking steps to reduce a public debt that is the worst among advanced countries.
Media surveys last week showed the DPJ would likely win around 50 or even fewer of the 121 seats up for grabs in the 242-member chamber -- well short of Kan's target of keeping all 54 seats the Democrats have up for re-election.
That would deprive the DPJ and its tiny coalition partner, the pro-spending People's New Party, of a majority in the upper house. The Democrats would be forced to seek new allies, complicating the government's ability to forge ahead with the fiscal reform that Kan has put at the heart of his campaign.
It would also leave Kan vulnerable to a challenge from party powerbroker Ichiro Ozawa -- a critic of his sales tax proposal -- ahead of a September party leadership vote. Few, though, would expect Kan to go without a fight.
Many voters have been having trouble finding a party to their taste -- although a flurry of new, small parties has broadened their options -- making precise predictions difficult.
The DPJ's current coalition partner opposes raising the 5 percent sales tax any time soon, as do some potential allies.
Other opposition parties agree a hike is inevitable but would probably be reluctant to help out the rival DPJ.
The leaders of two potential partners, the small, pro-reform Your Party and New Komeito, which partnered with the Liberal Democratic Party until its defeat last year, have rejected the idea of an alliance with the DPJ.
Analysts say they might change their tune later, but would drive hard bargains if the Democrats fare badly.
(Editing by Alex Richardson)
