Tue, September 02, 2008
TOKYO: Japanese Prime Minister Yasuo Fukuda resigned yesterday in an effort to break a political deadlock, becoming the second leader to do so in less than a year.
The 72-year-old leader has been struggling to cope with a divided parliament, in which opposition parties control the upper house and can delay legislation, even as the world's second largest economy slips toward recession.
"If we are to prioritize people's livelihood, there cannot be a political vacuum because of political bargaining, or a lapse in policies. We need a new team to carry out policies," Fukuda said.
"Taking into consideration that the extraordinary session of parliament should go smoothly, I thought it would be better for someone else to do the job," he said.
Analysts said Liberal Democratic Party (LDP) Secretary-General Taro Aso, an outspoken, right-leaning former foreign minister, was likely to succeed Fukuda.
Speculation had been simmering that the unpopular prime minister might be replaced before the general election that must be held by September 2009.
The yen dropped to 108 to a dollar and 158 to a euro on the surprise news, which caught traders off guard in a thinner than usual market because of a US holiday.
"Markets don't like political uncertainty and this falls firmly into that camp. It doesn't help overall even if he hasn't been particularly popular," Jeremy Stretch, markets strategist at Rabobank in London, said.
But Fukuda's resignation does not automatically mean an election. His party, the LDP, must choose a new leader and win the confidence of parliament's lower house if it wants to carry on leading Japan's coalition government.
Fukuda, a moderate conservative who favors close ties with Japan's Asian neighbors, took office last September after his predecessor, Shinzo Abe, suddenly resigned.
In China, analysts said there is room for "cautious optimism" in Sino-Japanese ties even after Fukuda's resignation.
"Fukuda resigned mainly because of domestic problems. And whoever succeeds him will not overlook the importance of a healthy relationship with China," said Feng Zhaokui, senior advisor to the National Society of Japanese Economic Studies.
"Fukuda's predecessor Shinzo Abe tried to mend relations with China Fukuda pushed it forward. Obviously Japanese politicians in general favor friendly ties (with China) despite the many cliques at work."
Japan's policies toward China are not likely to move backward irrespective of who succeeds Fukuda, Feng said.
Wang Taiping, China's former consul general in Osaka, said the key to post-Fukuda bilateral ties was how Japan's new prime minister positions China in his foreign policy.
"Junichiro Koizumi's foreign policy reflected a 'leaving Asia for America' mentality, whereas Fukuda paid more attention to its neighbors. That made a big difference," Wang said.
Wang said Taro Aso, who is seen by many as Fukuda's successor, "is not new when it comes to dealing with China. He is very clear about the sensitive issues and where the line can be drawn".
(Agencies)
