Out with the old and in with the new. Japan’s new leading party is promising rapid and effective changes that could bring its economy and related exchange traded fund (ETF) out of the recession.

The defeat of Japan’s long-standing conservative party, the Liberal Democratic Party (LDP), by the landslide victory of the opposition Democratic Party of Japan (DPJ) brings hopes that the political system will become more competitive, democratic and dynamic, according to BBC News. The DPJ will help steer policies away from bureaucratic and business interest that plagued the previous leading party.

The DPJ will keep committed to strong relations with the United States and may develop more friendly, long-term Sino-Japanese relations.

Major media report that the DPJ won more than 300 of 480 seats in lower house of parliament, which is more than enough to choose the next prime minister and control the national agenda, writes Tomoko A. Hosaka for The Associated Press. The Democrats vowed to expand the social safety net and reshape the economy with proposals, including a monthly $280 handout to families with children, toll-free highways, higher minimum wage and tax cuts.

Japan is currently dealing with a record 5.7% unemployment rate and spending is on the decline, compounding worries about jobs and wages. The new party also needs to address the problem of a rapidly aging and shrinking population.

• iShares MSCI Japan Index (EWJ): up 7.3% year-to-date

• PowerShares FTSE RAFI Japan (PJO): up 5.7% year-to-date

• WisdomTree Japan SmallCap Dividend (DFJ): up 9.8% year-to-date

For more information on Japan, visit our Japan category.

Max Chen contributed to this article.

Tags: Asia, DFJ, EWJ, Global ETFs, Japan, PJO