Japan PM under fire over suicide, pension mess

TOKYO, May 29 (Reuters) Fallout from a scandal-tainted minister's suicide and mismanaged pensions swirled today, threatening the chances that Japanese Prime Minister Shinzo Abe's ruling camp can win a July upper house election.

Agriculture Minister Toshikatsu Matsuoka's suicide yesterday, hours before he was to face questioning in parliament, coincided with a slump in Abe's approval ratings ahead of a July upper house election, his first big electoral test.

Today, a former executive of a public corporation at the centre of a bid-rigging scandal to which Matsuoka had been l inked was found dead in an apparent suicide, Kyodo news agency said.

''I am worried that (recent developments) will have considerable impact on the upper house election,'' Environment Minister Masatoshi Wakabayashi, who will fill in as farm minister told reporters after the regular cabinet meeting.

''It will be tough for the Liberal Democratic Party.'' Matsuoka, 62, had come under fire for a series of political funding scandals and questions about his suitability for the farm post were raised as soon as he was appointed in September.

Domestic media said Abe bore responsibility for appointing the scandal-tainted Matsuoka and keeping him in the job.

''This is a major blow ahead of the upper house election,'' said the conservative Sankei newspaper of the suicide.

Ordinary voters agreed the affair was damaging.

''Abe's ability to lead and bring together a team may be called into question,'' said Masayoshi Motteki, 62, who runs a restaurant and said he supports the LDP.

A ruling coalition loss in the upper house election would not force Abe to resign, since the more powerful lower chamber elects the prime minister.

But defeat would allow the opposition to block key legislation and a major loss would almost certainly spark calls from his own party for him to step down.

Analysts say a setback for Abe's pro-market government in the poll could sour foreign investors' view on Japanese stocks.

Abe's popularity had sagged sharply even before the suicide, mostly because of voter outrage over the failure of the government to keep track of some 50 million pension premium payments, meaning retirees could be short-changed.

Anger over corruption was another factor.

A survey by the Asahi newspaper conducted before the suicide and published today showed Abe's support rate had sunk to 36 percent, down eight points from just a week ago and the lowest level since he took office in September.

Opposition parties had threatened to submit a no-confidence motion against the health minister today if the ruling camp tried to push through the lower house a bill to drastically reform the scandal-plagued Social Insurance Agency, which manages public pensions.

But LDP Secretary-General Hidenao Nakagawa told reporters the ruling coalition would postpone a vote on that bill and instead submit one to help fix what media called the ''vanishing pension'' problem, then seek to enact the legislation as a package.

Political analysts said there might still be time for Abe's cabinet to recover its footing ahead of the election.

But some voters said they would not soon forget.

''This incident will still be in my head at the time of the election, so I think it would influence the way I vote,'' said 23-year-old Internet company worker Megumi Kumatabara.

Abe, at 52 Japan's youngest prime minister since World War Two, won praise soon after taking office on the diplomatic front for repairing chilly ties with China.

But support for Abe, who is pushing a conservative agenda that includes revising Japan's pacifist constitution and boosting its global security role, sagged after gaffes and funding scandals, including one that forced a minister to resign.

The LDP and its junior partner need to win a total of 64 of the 121 seats up for grabs in the July election to maintain their majority in the 242-seat upper house. Some analysts had said that would have been tough even before the latest developments.

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