Japan’s next leader, Yukio Hatoyama, is beginning a transition to power after winning a landmark general election.

Exit polls show his Democratic Party of Japan overwhelmingly defeated the Liberal Democratic Party, which has governed almost unbroken since 1955.

PM Taro Aso has conceded defeat and said he would resign as LDP head.

Media forecasts give the DPJ 308 of the 480 seats in the lower house to the LDP’s 119, almost an exact reversal of their previous standing.

Japan’s Nikkei stock market index jumped to an 11-month high in early trading as the scale of the DPJ’s victory became clear, but the rise of the yen and Chinese stock falls led to an overall fall of 0.3%.

Official results are still to be released.

ANALYSIS The vote was as much an expression of disgust with the Liberal Democratic Party as an endorsement of the Democratic Party of Japan. His challenge now  to disappoint.

Mr Hatoyama, the wealthy heir to an industrial and political dynasty, is expected to announce a transition team later in the day.

He is expected to be confirmed as prime minister when parliament meets in about two weeks.

His Cabinet is expected to be in place by then, and his party is also in coalition talks with two smaller opposition parties whose support it needs in the upper house.

“It’s taken a long time, but we have at last reached the starting line,” Mr Hatoyama told a news conference at his home in Tokyo on Monday.

“This is by no means the destination. At long last we are able to move politics, to create a new kind of politics that will fulfil the expectations of the people.”

Mr Aso said he would step down as LDP leader - his successor is expected to be named in September.

“I have no plan to run for re-election,” he said, quoted by the Associated Press. “The most important thing is rejuvenating our party.”

Kotaro Tamura, another LDP lawmaker, said: “We made too many mistakes. Very crucial mistakes… we changed prime minister three times without holding an election.”

‘Close partnership’

Correspondents say attention will now to turn to whether Mr Hatoyama can deliver on his election promises.

He must steer the world’s second biggest economy back to sustainable growth after a crushing recession, and tackle record unemployment.

Mr Hatoyama has also promised to expand the welfare state, even though Japan is already deeply in debt and the rapidly ageing population is straining social security budgets.

On foreign affairs, the DPJ says it plans to create a new diplomacy less subservient to the US and to improve relations with Japan’s Asian neighbours.

The White House has already said it hopes to forge strong ties with the incoming government.

“We are confident that the strong US-Japan alliance and the close partnership between our two countries will continue to flourish under the leadership of the next government,” White House spokesman Robert Gibbs said.

Kyodo News agency put turn-out at 69%, up from 67.5% in 2005.

Officials said people turned out despite a combination of typhoon-triggered rainfall around Tokyo and a government warning that a swine flu epidemic was under way.

A nine-year-old girl whose body was discovered in a supermarket lorry was killed by her mother’s long-term boyfriend, police believe.

Stacey Lawrence, from the West Midlands, was found strangled in a lorry park on the A605 near Warmington in Northamptonshire, on Saturday.

Darren Walker, aged 40 and also from the West Midlands, was found hanged in nearby woodland.

Detectives said they are treating the case as a murder-suicide.

Stacey had accompanied Mr Walker as he made deliveries to Spar stores in Norfolk on Friday.

Detective Chief Inspector Tricia Kirk said Stacey had regarded the trip as a “treat”, and her mother had no concerns before her death.

Ms Kirk added: “Our investigation is to try and find out what led to this tragic event taking place.

Darren Walker was in a long-term relationship with Stacey’s mother

“At the moment, we are treating it as a murder-suicide. We believe the little girl was murdered and the man then committed suicide.

“We are not aware of any medical conditions and we are not aware of any family arguments.”

Police had been alerted after the truck’s owners reported the vehicle missing on Saturday afternoon.

The Spar delivery vehicle was then traced to a lorry park on the A605 near Warmington and was discovered next to a Jet filling station.

Police said the cab of the lorry was not locked and officers found the body of the girl in the cab.

Both bodies were taken to Leicester Royal Infirmary on Saturday night for post mortem examinations.

Now comes the hard part. Handed a sweeping mandate for change, the Democratic Party of Japan (DPJ) begins the formidable task of delivering on a laundry list of promises intended to lift the country after its worst recession since World War II.

Yukio Hatoyama, third left, leader of the Democratic Party of Japan, celebrates the election results Sunday in Tokyo.

Voters — skeptical, pessimistic and impatient — are unlikely to give the party, which has never held office, much time to make good.

Japan is witnessing historic highs in unemployment and experiencing ramifications like homelessness for the first time.

Dissatisfied with the way Prime Minister Taro Aso was handling the crisis, the electorate booted from power his Liberal Democratic Party (LDP), which has governed the country for nearly half a century.

The election commission has yet to certify Sunday’s election results officially. But according to the parties, the DPJ won 3-to-1 over the LDP.

The DPJ’s 308 seats in the lower house of the parliament, compared with the LDP’s 119, is almost the exact opposite of their standing before Sunday’s vote.

An assortment of other parties snagged the rest of the seats in the 480-seat lower house.

Elections for the upper house will be held next year.

Bruised politically, Aso officially stepped down as head of his party on Monday. 

Poised to become the next prime minister is DPJ leader Yukio Hatoyama. He was restrained in his first public comments since the vote.

“I hope this victory will be for the people of Japan,” he said Sunday.

Hatoyama is setting up a transition team, but is not expected to announce his Cabinet until he officially takes office through a special parliamentary session in the next two weeks.

The DPJ leader has been touting a Barack Obama-style message of change. He has pledged to raise the minimum wage and discourage hiring through agencies or on temporary contracts.

Hatoyama’s party has adopted a salvation plan based on “trickle up economics.” It wants to put money in the hands of families, in hopes that they will spend it in Japan and stimulate the world’s second-largest economy.

Though Japan officially rebounded from its recession in mid-August, Japanese households have yet to feel secure about a lasting economic recovery.

In its election manifesto, the DPJ said it will pay about $3,000 per child to each family every year — to encourage women to have babies and reverse the country’s rapidly aging and shrinking population.

It will also pay about $1,000 a month to each unemployed Japanese as he looks for a job.

The eurozone’s annual rate of inflation was negative in August for the third consecutive month.

Prices in the 16-nation bloc fell 0.2% in the past year, Eurostat said, following the record 0.7% fall in July.

Inflation in the eurozone has been dragged down by lower energy and food prices and by falling demand from both companies and households.

The downward trend began in June with a 0.1% fall in prices, but a Japan-style deflationary spiral is not predicted.

Oil effect

Deflation is considered damaging to an economy because consumers tend to delay making major purchases until prices fall further. Without consumer spending to stimulate growth, economic output falls.

The European Central Bank’s target rate for inflation is just below 2%.

The reduced rate of price falls in August is “clearly primarily due to oil prices falling at a significantly reduced rate year-on-year,” said Howard Archer, chief European economist at IHS Global Insight.

“It seems highly probable that July marked the deepest deflation in the eurozone and consumer prices will turn positive year-on-year within the next couple of months,” he added.

Inflation in the eurozone peaked at 4.1% in July last year, when oil reached a record high of $147 a barrel.

The price of oil has since fallen back to about $70 a barrel.

econd-largest mobile operator. iPhone is set to debut in China by the end of the year.

Apple’s iPhone is set to make its debut in China by the end of this year after the US company reached agreement with China Unicom, the country’s second-largest mobile operator.

iPhone is set to debut in China by the end of the year.

China Unicom on Friday said it would start selling the 3G iPhone in the fourth quarter after signing a non-exclusive three-year contract with Apple.

The company said it would not use Apple’s traditional revenue-sharing model and would instead pay the group on a wholesale basis.

China Unicom said it hoped the introduction of the iPhone would boost falling profitability.

The company said on Friday that first-half net profit fell 42.1 per cent to Rmb6.62bn ($969m) amid heated competition, while revenues dropped 4.3 per cent to Rmb74.51bn.

Chang Xiaobing, chairman and chief executive, said he expected iPhones to lure more high-end users who spend more on data services.

“IPhones will help us to change the structure of our customer base and improve [average revenue per user],” said Mr Chang.

The news, which ended months of speculation about a partnership between the two companies, will open up a vast new market for Apple, which has sold an estimated 26m iPhones.

The move will put China Unicom and Apple in direct competition with China Mobile, which is set to launch a range of smartphones based on Google’s Android operating system.

The world’s largest mobile telecoms operator by subscribers will launch smartphones made by Dell, the US computer manufacturer, China’s Lenovo and Taiwan’s HTC.

China Telecom, meanwhile, is in talks with Research In Motion, maker of the Blackberry, and Palm to offer devices.

“I fear marketing expenses of the whole industry will rise because of this,” said Marvin Lo, analyst at Daiwa Securities.

Analysts doubted how much of a boost the iPhone would provide to China Unicom as grey-market iPhones not tied to any operator are widely available.

Analysts estimate 1m-2m iPhones are in use in China, which has nearly 700m mobile users.

Sandy Shen, analyst at Gartner, a research firm, said that, while grey-market imports had proved popular among some wealthy customers, many users have complained about the inconvenience of inputting Chinese characters into their phones, a grave disadvantage on mainland China were text messaging is hugely popular.

If the iPhone does prove a hit in China, analysts said, it could revive the Apple brand in the country. Apple’s Mac computers are rarely seen on the mainland.