Japan’s Abe announces resignation/Japan's ruling party in turmoil as premier quits

Japan’s Abe announces resignation
By David Pilling in Tokyo
Copyright The Financial Times Limited 2007
Published: September 12 2007 05:16 | Last updated: September 12 2007 09:55


Shinzo Abe on Wednesday plunged Japan into political crisis by announcing his resignation only two days after parliament reconvened for an extraordinary session.

Mr Abe, who refused to quit after July’s disastrous defeat in upper house elections, said he had decided to resign on Wednesday because lack of public trust made passage of an anti-terror law extremely difficult.

The prime minister, who called an emergency press conference to announce his decision, said he had sought a compromise with the opposition but that Ichiro Ozawa, leader of the Democratic Party of Japan, had refused to see him. Mr Ozawa later denied any such meeting had been requested.

Mr Abe said his Liberal Democratic Party should pick a new leader as quickly as possible so that the anti-terror law, which allows Japan to refuel ships in the Indian ocean, could be passed.

“We should seek a continued mission to fight terrorism under a new prime minister,” he said.

Taro Aso, secretary-general of the LDP, said the party would hold an election next week to “avoid a political vacuum”. Mr Aso, a conservative like Mr Abe, is considered the most likely successor as LDP leader and hence prime minister. But other candidates, including Sadakazu Tanigaki, former finance minister, could yet emerge as contenders.

Japanese shares gave up earlier gains on news of Mr Abe’s resignation, with the Nikkei 225 ending down 0.5 per cent at 15,797.60.

Parliamentarians in the now-rudderless LDP are likely to resist calls for a snap election for fear of losing their seats and, perhaps, their party’s parliamentary majority.

Mr Ozawa has been pressing for a dissolution of the lower house, but Wednesday he said it was for the new leader of the LDP to decide what course to take. The LDP has run Japan, with one nine-month hiatus, for more than half a century since 1955.

Jesper Koll, president of Tantallon Research Japan, part of an Asian hedge fund, said he was baffled by the timing of Mr Abe’s resignation. Referring to the samurai code of honour and bravery that Mr Abe has sometimes invoked during his premiership, he said: “This is not bushido. This is chicken.”

Mizuho Fukushima, head of the socialist party, said: “The timing is really awful. This is really irresponsible.” She said it was inconceivable that Mr Abe should have hung on after July’s electoral thrashing, opened parliament and even given a big policy speech on Monday, before tamely quitting for no obvious reason.

Kaoru Yosano, chief cabinet secretary, said that although the prime minister had not mentioned it, Mr Abe’s deteriorating health may have played a part in his decision. “We have been worried about his health, particularly during his [recent] trip to south-east Asia,” he said. The prime minister has been looking visibly tired and deflated in recent days.

The LDP was thrashed in July’s upper house elections as regions that had been left behind by economic reforms voted in unprecedented numbers for the opposition.

Mr Abe’s policy agenda of creating a “beautiful Japan” and “escaping the post-war regime” failed to gel with an electorate more worried about its pensions, healthcare provision and wages. His cabinet was also plagued by a series of scandals, some involving corruption, that led to the resignation of four ministers and the suicide of another.

Japan's ruling party in turmoil as premier quits
By David Pilling in Tokyo
Copyright The Financial Times Limited 2007
Published: September 13 2007 03:00 | Last updated: September 13 2007 03:00


Japan's ruling Liberal Democratic party was last night scrambling to keep its grip on power, saying it would hold elections next week to find a replacement leader for Shinzo Abe who stunned his party by resigning as prime minister.

Taro Aso - LDP secretary-general and, like Mr Abe, a social conservative and nationalist - is favourite to take over, but his selection by a deeply divided party is far from certain. Other challengers are likely to emerge, though last night Junichiro Koizumi, former prime minister, was reported to have turned down a request to run again.

Whoever prevails will come under intense pressure to hold a general election that could topple a ruling party that has had a near-monopoly on power for the past half-century.

Political analysts expect the LDP to go to the polls next year, though an election is not constitutionally necessary until September 2009.

Ichiro Ozawa, leader of the opposition Democratic Party of Japan, which mauled the LDP in July's upper house elections, said his party would continue to oppose an extension of the anti-terrorism bill. Difficulty in passing the special bill - which allows Japan to refuel US and other allied ships in Afghanistan-bound operations - was the ostensible reason for Mr Abe's surprise resignation.

Mr Abe said he had decided to go in order to prevent "a political vacuum" and ensure that a new prime minister was in place to push through what he said was Japan's vital contribution in the fight against terrorism.

Yukio Hatoyama, secretary-general of the DPJ, said there "was something suspicious" about Mr Abe's decision to resign only two days after he had opened an extraordinary session of parliament. Mr Abe's cabinet has been plagued by scandals over money and other matters.

The sudden resignation calls into question the ability of Japanese leaders to pursue what Mr Abe called "assertive diplomacy", a stance welcomed by Washington, which wants Japan to shoulder more of a global burden.

Mr Abe - at 52, Japan's youngest postwar prime minister - has struggled to persuade an electorate worried about pensions, healthcare and growing wealth disparities about the importance of his international agenda. His resignation could also set back the related cause of revising the pacifist constitution.

Markets reacted calmly, with the Nikkei 225 average down just 0.5 per cent and the yen treading water. But economists said there was concern among some foreign investors that Mr Abe's bitter experience might lead the government to backtrack on reforms introduced under Mr Koizumi.

Heizo Takenaka, considered the architect of the small-government, market-oriented policies pursued by Mr Koizumi, said: "If reforms stop, it will be bad for regions as well as the Japanese economy as a whole."

Jesper Koll, president of Tantallon Research Japan, part of an Asian hedge fund, said he was baffled by the timing of Mr Abe's resignation. The premier had steadfastly refused to quit after July's electoral defeat. Referring to the samurai code of honour that Mr Abe has sometimes invoked, Mr Koll said: "This is not bushido. This is chicken."

Kaoru Yosano, chief cabinet secretary, said Mr Abe's physical condition may have been afactor.