Has Japan entered its "Kan do" era? That's certainly the hope of the struggling Democratic Party of Japan at the ascension to power of Naoto Kan as prime minister after the disastrous run of Yukio Hatoyama. Mr. Kan has a rocky road ahead. He must repair strained relations with the United States, restore the public's trust in the DPJ, and craft policies to restore economic health to a country that is still suffering from deflation. Whether he succeeds or fails may well seal the fate not only of the DPJ to maintain its legitimacy, but also of Japan to pull out of its current malaise.

A visit to DPJ headquarters this week and discussions with top party officials makes it clear that those inside the party still believe in its mission and their ability to create a new Japan. Yet my conversations show equally that the party must do more to turn its vision into reality through concrete policies. The party's new manifesto, issued this month, moves beyond the vaguer pronouncements of the seminal electoral manifesto of last summer, but still lacks the specifics needed to turn aspirations into policy.

Above all else, the DPJ wants to purge the party of the influence of campaign cash and to end Japan's deflationary environment. It is telling, perhaps, that money, both as the root of all evil and as the reflection on the weak economy, is the major policy challenge. The DPJ swept into power last August promising to end the culture of corruption fostered by the long-ruling Liberal Democratic Party and pull Japan out its two decade-long economic slump. So far, money politics has claimed the first DPJ premier and has continued to drag down the economy.

The DPJ's plans include reducing the corporate tax rate (particularly on small- and medium-sized enterprises), continuing regulatory reform and promoting comprehensive economic zones, though few specifics have been announced yet. In addition, the Kan administration will seek to conclude free-trade agreements, increase foreign direct investment in Japan, and focus on "infrastructure exports" such as high-speed railways and nuclear power plants.

Yet Japan faces difficulties reaching these goals, as any movement on free trade continues to be hamstrung by the powerful farmers' lobby. The country also faces tough competition abroad; countries ranging from China to France and South Korea are aggressively hawking their fast trains and nuclear plants around the globe.

Responding directly to the export challenges, Goshi Hosono, the DPJ's young deputy secretary general, explains that Japan's technological prowess can compete with any other nation's and that "we can be a full service provider of such technologies, owing to our capabilities and safety records." Yet the country will have to lobby aggressively for market share abroad, which is one reason Transportation Minister Seiji Maehara is currently in the U.S. making a pitch for Japan's bullet-train system.

Of equal interest, and challenge, is Mr. Kan's national-security agenda, or as he terms it, his plan for "realizing enlightened national interest through responsible foreign policies." Here, there are subtle changes to the Hatoyama manifesto. At the top of the list is deepening the U.S.-Japan alliance across the board, followed directly by acknowledging the 2006 agreement to move Marines out of the Futenma Air Station and into a new facility in the north of Okinawa.

Mr. Kan thus has made it clear that he will try to avoid a direct confrontation with the U.S. over the Futenma replacement plan. But he cannot ensure that local elections in Okinawa slated for September and November may not result in the emergence of officials opposed to the relocation agreement, or that the final plans for the new runway facility will be finished and approved by August, a concern expressed to me by senior DPJ officials.

The foreign policy section of Kan's manifesto shows a more nuanced approach to overseas issues than previously expressed by the DPJ. The party promises to examine how Japan's Self Defense Forces can play a larger role in peacekeeping operations, and at the same time calls for establishing mutual trust with Japan's neighbors, as a step toward a broader East Asian Community. Alliance managers will also look for action on the promise to finish Japan's National Defense Program Guidelines and Mid-Term Defense Program by the end of this year, thus ending the limbo in security planning that began under Mr. Hatoyama.

Equally importantly, Mr. Kan plans to "maintain and stimulate the development of defense-related manufacturing technologies," and it is rumored that senior DPJ officials will soon propose the abandonment of the restriction on foreign defense industrial cooperation that has so hampered Japan's industrial base. These changes, if carried out, would signal a significant shift in how the DPJ views the country's role in the world and the future possibility of contributing to regional and global stability, while also helping to boost higher valued-added parts of the economy.

Controlling the policy process is hard for any party, and the DPJ has been an example of the problems facing a political organization that fails to move quickly from campaigning to ruling. Yet the new "Kan do" attitude provides hope that the DPJ learned from its mistakes, and is serious about turning around Japan's fortunes. Unless he comes up with more specifics, however, Prime Minister Kan will leave Japan in a far more difficult, and perhaps unrecoverable, position than his predecessors, who provided strong examples of what not to do.

The first test of Mr. Kan's ability to shape his country will come on July 11, in elections for the Upper House. A DPJ loss of seats will make it harder for Mr. Kan to do what he wants, but holding his slim majority means any failure is his, and his alone.

Michael Auslin is a resident scholar at AEI.

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