Sunday's victory by the Democratic Party of Japan (DPJ) ends half a century of almost unbroken rule by the Liberal Democratic Party (LDP) and breaks a deadlock in parliament, ushering in a government that has promised to focus spending on consumers, cut wasteful budget outlays and reduce the power of bureaucrats.

Financial markets welcomed the end to a political deadlock that has stymied policies as Japan struggled with its worst recession since World War Two. The Democratic Party and its small allies won control of the upper house in 2007.

Media forecasts show the Democrats with about 308 seats in the 480-seat lower house, compared with only 119 for the LDP.

The Nikkei share average hit jumped to its highest in nearly 11 months before easing back, while the yen rose to a 7-week high. The yen was boosted by the end of electoral uncertainty, though the cabinet line-up may not be decided for weeks.