Japan PM to resign in light of tsunami aftermath

Race wide open to replace Naoto Kan who is under fire for response to radiation crisis; Democratic Party of Japan to pick new leader.

August 26, 2011 09:22
2 minute read.
Japan's Prime Minister Naoto Kan

Japan's Prime Minister Naoto Kan 311. (photo credit: REUTERS/Toru Hanai)

TOKYO - Japanese Prime Minister Naoto Kan, under fire for his response to the massive March tsunami and the radiation crisis it triggered, confirmed his intention to step down on Friday, Kyodo news agency reported, clearing the way for the ruling Democratic Party of Japan (DPJ) to pick a new leader.

The race to pick Japan's sixth leader in five years was up in the air after media said ruling party powerbroker Ichiro Ozawa was unlikely to back former foreign minister Seiji Maehara, a security hawk who is popular with voters.

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Kan's successor faces a mountain of challenges, including a strong yen, rebuilding from the devastation of the March disasters, ending the radiation crisis at a crippled nuclear plant, forging a new energy policy, and curbing massive public debt while funding the bulging social security costs of a fast-ageing society.

Rifts over the role of Ozawa, a political mastermind saddled with an image as an old-style wheeler-dealer, have plagued the DPJ since it swept to power in 2009 promising change.

Whether and when to raise taxes to curb a public debt already twice the size of Japan's $5 trillion economy is a focus of debate in the leadership race, but any decision by Ozawa on who to back is seen as likely to be decided more by his hopes of boosting his clout than by policy positions.

It was unclear whether Ozawa, who heads the DPJ's biggest group despite suspension of his party membership over a funding scandal, would back an existing candidate or try to find a new contender to support, the Yomiuri newspaper said.

Ozawa left a meeting with an ally, former prime minister Yukio Hatoyama, without giving any clues about his preference. Trade minister Banri Kaieda, who offered his resignation to Kan in order to run, was in talks with the ex-premier.

There is even simmering speculation Ozawa might back Finance Minister Yoshihiko Noda, the most fiscally conservative of the current contenders. Ozawa long ago proposed raising the sales tax to fund social welfare costs but in recent years has promoted populist policies to give consumers more spending power.

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