Japan PM Mori repels rival, but days numbered

Japan PM Mori repels rival, but days numbered
REUTERS

TOKYO, NOV 21: Japanese Prime Minister YoshiroMori got back to the business of running Japan on Tuesday after surviving a no-confidence vote and averting a disastrous split in his party, but his days in the top job looked numbered.

Mori welcomed the defeat of the Opposition-sponsoredno-confidence motion, which became a fait accompli after his reformist Liberal Democratic Party (LDP) rival Koichi Kato reversed his decision to vote in favour.

His first order of business was to ensure passage of an extra4.78 trillion yen ($43.52 bilion) stimulus budget through parliament. Its approval eased fears that a delay would stall a fragile recovery in the world's number two economy.

"It's good that the no-confidence motion was voted down whenJapan is confronting both domestic and international issues," Mori said after the pre-dawn vote on Tuesday.

"Now I should stand straight and do my best to carry on withthe business of government."

But the troubles of an unpopular Prime minister with areputation as a policy lightweight are from over, and anxious party officials moved to curb opportunities for error by the gaffe-prone Mori.

"We will request that Mr Mori refrain from making flippantremarks and from rash behaviour which may draw criticism," Junichiro Koizumi, head of Mori's own faction in the LDP, was quoted by Japanese media as saying.

Mori secured the victory in a vote that had been too close tocall until a tearful Kato, worried his allies would lose party electoral backing if they cast their ballots for the Opposition-sponsored motion, told them to abstain.

Hopes that Kato would win the rare and raucous battle in theconservative party that has ruled Japan for most of the past half-century had cheered those hoping that vital but painful economic reforms would now pick up speed.

"I do not regret that I pointed out the problems we face,"Kato told broadcaster Fuji Television.

Finance Minister Kiichi Miyazawa, a party elder and formerPrime minister said Kato had won understanding for his views.

"It must have been difficult for you, but your thoughts havegained understanding in both the party and the public. That's what I told him," Miyazawa told reporters after meeting Kato.

Mori was set to join a meeting of leaders from China, SouthKorea and the Association of Southeast Asian Nations (ASEAN) in Singapore as scheduled from Thursday.

NOT IF, BUT WHEN

Despite the facade of business as usual, attention hasalready shifted to the question of when Mori -- one of Japan's most unpopular premiers in decades and seen as an election liability to his party -- might step down and and who can be found to replace him from among a dwindling pool of candidates.

Analysts said the outlook for Mori -- whose approval ratingshave sunk below 20 percent in a raft of recent polls -- is grim.

"It will be difficult for Mr Mori to continue serving asPrime minister if his support rate continues falling. It is likely that he will take responsibility for the recent political turmoil," Yotaro Kobayashi, chairman of the Japan Association of Corporate Executives was quoted as saying by Kyodo news agency.

Mori received yet more bad news on Tuesday, when a survey bythe daily Asahi Shimbun showed his approval rating had slipped to 18 percent, the lowest since he took office in April

Financial markets, which typically dislike politicaluncertainty, were disappointed that Mori had survived and worried that reforms would not be forthcoming.

Tokyo share prices slid to 20-month lows before rising toclose slightly lower at 0.85 percent. The yen looked vulnerable after sinking as low as 110.35 against the dollar in New York, while bond prices inched higher.

RESIGNATION SCENARIOS

Analysts said there were several possible scenarios for whenMori might resign, and politicians would be seeking to select the moment to minimise damage to the LDP ahead of key Upper House elections next July.

December would be least disruptive since the extra budgetwill have been enacted. A cabinet reshuffle is expected then in any case before a huge January reshuffle of government ministries aimed at boosting efficiency.

The LDP could also decide to hold an early election to pick anew President in March, a move urged by party Young Turks eager to boost the party's image before the elections.

Among the possible candidates cited to replace Mori ahead ofthe election are veteran Foreign Minister Yohei Kono, former foreign minister Masahiko Komura, and the quixotic Koizumi, who has advocated drastic economic reforms such as privatising Japan's massive postal savings system. (With additional reporting by George Nishiyama)