The Liberal Democratic Party may lose the next election because its economic policies, including spending cuts to trim the deficit, are "fundamentally wrong," according to Nagoya Mayor Takashi Kawamura.

"The government says Japan is going bankrupt because of its huge debt, but this is propaganda," Kawamura said in a recent interview. "How can a nation fail when there are excessive savings in banks?"

Kawamura, who was a member of the Democratic Party of Japan in the Lower House before becoming mayor in April, said the government could issue more bonds because the savings rate of individuals can support the policy.