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Major Japanese postal reform

Japanese premier Junichiro Koizumi won a major political battle this week as he managed to push through the Japanese parliament a postal service privatization plan that he has championed for much of his political career. The new postal law passed 134-100 in the weaker upper chamber of parliament following approval in the lower house.

Japan Post (which has 25,000 post offices - more branches than any Japanese bank) and some $3 trillion in assets will be split into four entities under a new holding company, and then privatized in two years` time.

While speculation rose over which issue would next be tackled by Koizumi, observers say that repairing relations with China and South Korea, where feelings are raw over Japanese attitudes about its role in the Second World War and colonialism, will take a high priority for the remainder of the prime minister`s term.