Japan ministers resign ahead of reshuffle
(Agencies)
Updated: 2004-09-27 13:22

Japanese cabinet ministers have tendered their resignations, setting the stage for Prime Minister Junichiro Koizumi to make new appointments aimed at boosting his popularity and tightening his grip on power after a set-back in July's upper house elections.

Japanese Prime Minister Junichiro Koizumi has appointed new party executives to his ruling Liberal Democratic Party (LDP), hours ahead of an expected cabinet reshuffle aimed at pushing a reform package. [file photo]

Chief Cabinet Secretary Hiroyuki Hosoda, who announced the resignations, told a news conference on Sunday he would stay on in the key role of top government spokesman.

Seen as something of a lightweight, Hosoda took over the post -- traditionally held by one of the premier's closest aides and a politician with considerable clout -- after his heavyweight predecessor, Yasuo Fukuda, resigned suddenly in May.

Koizumi, who sprang to power in 2001 on a wave of public support for his economic reform agenda, earlier unveiled a new line-up of top party executives.

He is expected to announce his cabinet appointments around 3 pm (7 a.m. British time), Kyodo news agency said.

Former farm minister Tsutomu Takebe was tapped as the Liberal Democratic Party's secretary general, the party's second in command and main election strategist.

Kaoru Yosano, a former trade minister, was named LDP policy council chief and ex-defence minister Fumio Kyuma was picked as chairman of the general council, the top decision-making body on party matters.

Finance Minister Sadakazu Tanigaki had been mentioned as a possibility for the secretary general post, but Takebe's appointment raised the likelihood he would stay in the cabinet.

Financial markets were unfazed by the announcements.

"It's not something that will either gain or lose support," Chuo University political scientist Steven Reed said of the party appointments. "No one is a clear anti-reformer, though, so it's not as if he's given in."

Takebe came under heavy fire when he served as agriculture minister, with opposition calling for his resignation over his handling of Japan's first case of madcow disease in 2001.

Economics and Financial Services Minister Heizo Takenaka -- Koizumi's right-hand man on reform -- was expected to stay in the cabinet but relinquish either his macro-economics role or responsibility for financial services.

He is also a candidate for a new portfolio in charge of privatising postal services, one of the premier's pet projects.

Koizumi has been playing his cards close to his chest in what analysts say is an attempt to maximise the news value of the shake-up, but financial markets have remained calm.

Reviving past tactics such as appointing non-politicians, relatively youthful candidates and women while ignoring party factions might help boost Koizumi's support ratings.

But with the public accustomed to his surprises, achieving a significant popularity ratings bounce could be difficult.

Media surveys earlier this month put Koizumi's public support at just over 40 percent, a far cry from the dizzying 80 percent he boasted when he took office.

Koizumi's decision in June to push through an unpopular law raising pension premiums and cutting benefits hurt his support base and benefited the opposition Democratic Party in the July upper house election.

Sending troops on a reconstruction mission to Iraq, the Japanese military's biggest and riskiest deployment since World War Two, also dampened public enthusiasm for the prime minister.

Koizumi needs to select a team that can quash opposition within his own party to reforms such as postal privatisation during what will likely be his final two years in office.

One of the biggest of Koizumi's past surprises was two years ago when he appointed Takenaka to the financial services post.

Takenaka produced a hard-line banking reform plan, triggering a steep stock market sell-off dubbed the "Takenaka shock".

Two years on, though controversy persists, Takenaka's programme to make Japan's banks halve their non-performing loans by March 2005 is on track to meet its targets and some economists credit him with Japan's economic recovery.

Political blue-blood Taro Aso has also been tipped as another strong candidate for the postal job, and Kazuo Kitagawa, the 51-year-old policy chief of the Buddhist-backed New Komeito Party, the junior member of Japan's ruling coalition, was mentioned in media reports as a potential trade minister.

Most experts expect someone from the younger generation of financially savvy lawmakers to step in as the new banking tsar, which could be well received by the markets.

Koizumi's longest-serving cabinet member, Foreign Minister Yoriko Kawaguchi, could also be shown the door.

LDP politicians have criticised Kawaguchi, who is not member of parliament, for her lack of clout. Media have mentioned university professor Kuniko Inoguchi, who served as Japan's ambassador to the U.N. Conference on Disarmament for two years to April this year, as Kawaguchi's most likely successor.

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