TOKYO — Japan faced political gridlock after the ruling party's thrashing in an election on Sunday, which could thwart efforts to curb a huge public debt and get the economy in shape. It also put Prime Minister Naoto Kan's job at risk.

Voters dealt Kan's Democratic Party of Japan (DPJ) a stinging rebuke, depriving it and a tiny ally of an upper house majority less than a year after the DPJ swept to power promising change.

The DPJ won just 44 seats, far short of Kan's goal of 54, and its partner the People's New Party won none. The main opposition Liberal Democratic Party (LDP) won 51 seats.

The Democrats still control the more powerful lower house. But they need help from other parties to push bills through the upper house as they struggle to end decades of stagnation in the world's No 2 economy and to cut the massive public debt.

"We're likely to have lost another two years stuck in parliamentary gridlock rather than action," said Jesper Koll, director of equity research at JP Morgan Securities Japan.

Japan's economy is recovering but analysts wonder for how long. Japanese manufacturing confidence edged up in July but the pace of gain slowed, a Reuters poll showed, in a sign companies may be wary of slowing growth.

Markets have so far taken the election outcome in their stride. The Nikkei share average inched up after a weak start, the yen eased a tad against the dollar, and Japanese government bond futures edged higher.

The election results also leave Kan vulnerable to a challenge from inside his own party, though he said he would stay in his job. Kan, in office just one month, is already the fifth prime minister in three years.

The DPJ won power in a historic landslide only last year, ousting the long-dominant conservative Liberal Democrats with promises to cut waste and focus spending on consumers.

But public backing nosedived due to funding scandals, chaotic policymaking and mishandling of a feud over a US airbase in southern Japan.