The governing coalition led by Japan's pro-nuclear Liberal Democratic Party is predicted to win a majority in the July 21 Upper House elections.

That prospect might alarm the almost half of all Japanese citizens who say they don't want to restart the 48 nuclear reactors that remain offline for safety checks after the March 2011 earthquake and tsunami that triggered a catastrophic meltdown. Even now, engineers are struggling to contain the radioactive water seeping into the groundwater under the crippled Fukushima Dai-Ichi facility.

Yet nuclear power, which before the tsunami generated almost 30 percent of Japan's electricity, is reliable, safe and climate-friendly, and should remain part of the country's energy mix. The challenge Japan faces is to tear down the "nuclear village" -- the collusive nexus of government and industry that drove the country to pursue atomic energy at the expense of its citizens' safety.

The relationship was so cozy that even months after the disaster, more than 50 ex-government officials were still working at the Tokyo Electric Power Co. (9501), Fukushima's operator.

Last September, Japan's previous government took an important first step by creating theNuclear Regulation Authority. Unlike the Nuclear and Industrial Safety Agency that it replaced, the NRA is not housed within the Ministry of Economy, Trade and Industry, which aggressively promoted Japan's nuclear industry. The new agency has been granted more bureaucratic independence and has strict rules governing personnel transfers -- once you work there, for instance, you can't go back to your ministry. Already, the NRA has declared that the Tsuruga reactor of the Japan Atomic Power Co. sits on an active seismic fault, a finding that could keep the plant closed and lead to the company's collapse.

David Fuller's view Prime Minister Shinzo Abe will know that Japan's expensive and largely imported energy supplies represent one of the biggest hurdles faced by his economic recovery. Therefore, restarting Japan's nuclear programme is essential. However, this will encounter significant and justified opposition if the government only reopens nuclear power stations, following inspections, of plants that are currently closed.

To address the nuclear safety issue, Japan needs a medium to longer-term programme, including the following steps: 1) Permanently close the Tsuruga reactor, mentioned above, and any others that the NRA regards as unsafe; 2) Announce that only stations approved by the NRA will be reopened, but only for a limited period because they are 'old nuclear' in terms of technology; 3) Commence a 'new nuclear' programme, based on improved technologies, and locate these plants in regions that do not sit on seismic faults.

Japan needs to focus on all competitive and reliable sources of energy, from oil and gas, including shale projects, to nuclear, hydroelectric and solar. Where these are not economically feasible within Japan's national territory, they can be developed in conjunction with energy industries in less developed countries. As a high-tech economy, Japan has the skills to become a leader in energy development programmes.

Meanwhile, helped by a reinvigorating economy, Japan's stock market recovery is already well on its way to qualifying as a cyclical bull market. A return to the 18,000 - 20,000 region appears achievable during the remainder of this year. Additionally, subject to competitive energy costs, Japan is a candidate for a secular (long-term) uptrend.