Japan's Takenaka to resign as lawmaker

TOKYO, Sep 15 (Reuters) Japanese Internal Affairs Minister Heizo Takenaka, outgoing Prime Minister Junichiro Koizumi's right-hand man on economic reforms, said today he would resign as a lawmaker later this month.

Takenaka was an academic when he was tapped to join Koizumi's cabinet in 2001, and his resignation does not necessarily bar him from any future cabinet post.

But the move suggests he does not expect to play a major role under the leadership of Shinzo Abe, who is almost certain to succeed Koizumi as prime minister after an election for the ruling party leadership next week.

''I informed Prime Minister Koizumi today and he understood,'' Takenaka told a news conference after announcing he would give up his seat in parliament's upper house on September 26, the day parliament convenes to select a new prime minister.

The Mainichi Shimbun daily, quoting sources, said Takenaka was planning to head a new think tank at Tokyo's Keio University, where he was a professor before entering politics.

His departure clears the way for Shinobu Kandori, a professional female wrestler, to serve out the remainder of his term for him until July 2010.

Takenaka's seat was on the ruling party slate in one of the proportional representation blocs, so Kandori will replace him without an election as she was next in line on the slate.

Takenaka, 55, previously held posts as banking minister and economics minister and is credited for fighting conservatives within the ruling party to push through tough financial reforms that ultimately lifted Japan out of a bad-debt crisis.

The bad loans that built up after the burst of Japan's bubble economy held the economy down, but anti-reformers had said writing them off could take a lifeline away from small companies in some regions and trigger a wave of unemployment.

By 2004, however, with the economy on the mend and banks having got back to health, the ruling party had become more accepting of Takenaka's policies and he was tapped by the party to run for a seat in parliament, which he won comfortably.

Takenaka currently doubles as the minister in charge of postal privatisation, Koizumi's pet project aimed at weaning the ruling party from its addiction to wasteful public spending.

''You can't talk about the Koizumi reform without talking about Tekenaka,'' Koizumi told reporters.

Koizumi called a snap election last year and billed it as a referendum on the project.

His party then won by a landslide, paving the way for the privatisation process to begin next October.

Stock prices came under pressure after news of Takenaka's resignation but some analysts said the move was not a surprise.

''It won't have an impact on stock prices because he was not expected to be in the new cabinet anyway,'' said Nomura Securities strategist Seiichiro Iwasawa.

REUTERS AB KN1606