Japan privatizing postal service

TOKYO – Japan’s upper house approved the privatization of the country’s postal service Friday, setting in motion the creation of the world’s largest private bank and delivering a crucial victory for Prime Minister Junichiro Koizumi’s reform plans.

The 134-100 vote paved the way for the enactment of the closely watched legislation. The package was passed overwhelmingly by the powerful lower house on Tuesday.

The bills would split up and sell off Japan Post’s delivery, savings deposit and insurance services by 2017. The system controls some $3 trillion in savings and insurance deposits.

Koizumi has argued the change is needed to put the system’s massive deposits at the disposal of private investors.

The vote was a triumph for Koizumi, who called snap elections that he billed as a referendum on postal reform after the upper house rejected the package in August. His Liberal Democratic Party won the ballot in a landslide, guaranteeing the package’s success in Parliament.

Proponents argue the reform would make more efficient use of Japan Post’s massive deposits, while streamlining the country’s enormous delivery service.