Japan PM Abe quits after year of scandal, crisis

Tokyo, Sep 12: Japanese Prime Minister Shinzo Abe abruptly announced his resignation today after a year in power dogged by scandals, an election rout and a crisis over Japan's support for US-led operations in Afghanistan.

The hawkish Abe, who took office almost 12 months ago promising to boost Japan's global security profile, had seen his clout dwindle after a drubbing in July upper house elections, but the announcement came as a bolt out of the blue.

''I determined today that I should resign,'' a weary-looking Abe told a news conference. ''We should seek a continued mission to fight terrorism under a new prime minister.'' Abe, at 52 Japan's youngest prime minister since the end of World War Two, had reshuffled his cabinet only last month to rekindle public support, but a poll this week put his support just below the critical 30 per cent level.

''There are many things I reflect on,'' the soft-spoken grandson of a prime minister said. ''It is my responsibility that my old and new cabinet could not secure the public's trust.'' The yen and stocks slipped on concerns about the political uncertainty.

Abe is expected to stay on in a caretaker role until a successor is chosen from his Liberal Democratic Party (LDP).

He had indicated that he would step down if he failed to extend a Japanese naval mission supporting US-led operations in Afghanistan, but the timing of his move was unexpected.

''It is the worst possible timing,'' LDP lawmaker Gen Nakatani told Fuji Television. ''Parliament has started and it's now lost its leading act. There will be confusion, loss and trouble.'' LDP Secretary-General Taro Aso, a close Abe ally who shares most of his hawkish views on security policy, is seen as frontrunner to succeed as LDP president and hence, premier.

Other names floated include former finance minister Sadakazu Tanigaki and former chief cabinet secretary Yasuo Fukuda.

'Worst Possible Timing'

Opposition parties, which won control of parliament's upper house in the July poll and can delay bills including the enabling legislation for the Indian Ocean naval mission, had been prepared to grill Abe in parliament this afternoon.

Financial market players were also caught off guard.

''The timing is astonishing. It's a huge surprise. He said he would risk his job in passing the anti-terrorism law, so I don't know why he is resigning before making the effort,'' said Koichi Haji, chief economist at NLI Research Institute.

Abe said he had decided to quit because opposition Democratic Party leader Ichiro Ozawa had declined to hold a one-on-one meeting about the Afghan support mission.

Ozawa denied he had rejected a meeting out of hand, and added he was ready to meet Abe's successor.

But he told a news conference that his party's stance on the Afghan support mission would not change.

Abe's support ratings have floundered amid government bungling and theft of public pension premiums and a series of scandals and gaffes that cost him five cabinet ministers, including one who committed suicide.

''At first I had high hopes for him, but I was disappointed because ultimately he had no leadership,'' said Kumiko Eno, 60, a Tokyo housewife.

Diplomacy Over Economy

Abe has put most of his energy into diplomacy -- improving relations with China and South Korea and tightening ties with the United States -- and pushing his pet project of education reform.

So some analysts said that his resignation might not affect economic policies all that much.

''But the political uncertainty will surely sour market sentiment, so I expect stock prices to get hit. People may take a wait-and-see approach for now, but it would be hard to buy Japanese shares in the long term,'' Haji said.

Others noted his successor faced tough policy headaches.

''As for economic policy, his successor will have to take over the difficult task of balancing fiscal consolidation and efforts to revive regional economies, when changing the tax system is an option that is very difficult to take,'' said Takeshi Minami, chief economist at Norinchukin Research Institute.

Reuters
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