Last Updated: Mon Aug 29, 2011 15:31 pm (KSA) 12:31 pm (GMT)

Japan’s finance minister to be country’s new PM

Finance Minister Yoshihiko Noda was chosen on Monday to become Japan’s sixth prime minister in five years. (Photo by REUTERS)
Finance Minister Yoshihiko Noda was chosen on Monday to become Japan’s sixth prime minister in five years. (Photo by REUTERS)

Finance Minister Yoshihiko Noda was chosen on Monday to become Japan’s sixth prime minister in five years, but has to overcome a divided parliament and deep rifts in the ruling party if he is to make more of a mark than his predecessors.

Noda is considered a safe pair of hands to lead the world’s third-biggest economy, but doubts run deep as to whether he will have sufficient support and stay in office long enough to tackle a long list of economic woes and cope with a nuclear crisis.

The 54-year-old Noda, who defeated Trade Minister Banri Kaieda in a run-off vote in the ruling party, must deal with a resurgent yen that threatens exports, forge a new energy policy while ending the worst nuclear crisis since Chernobyl, and find funds to rebuild from the March 11 tsunami at a time when huge public debt has already triggered a credit downgrade.

"Noda has inherited all the same problems – a divided parliament, a divided party, a strong yen, a Tohoku [northeastern Japan] desperate for progress on reconstruction and an early end to the nuclear crisis," said Jeffrey Kingston, director of Asian Studies at Temple University’s Japan campus.

"I think the honeymoon will be very short-lived."

No Japanese prime minister has lasted much more than a year since 2006 and most market players polled by Reuters this month thought the next government head would be no exception.

Noda, who will be confirmed by parliament on Tuesday, will be the third premier since his ruling Democratic Party of Japan swept to power in 2009, promising change.

Instead of a deep debate over how to jolt Japan out of decades of stagnation, the party vote had turned into a battle between allies and critics of Ichiro Ozawa, a 69-year-old political mastermind who heads the party’s biggest group even as he faces trial on charges of misreporting political donations.

Kaieda, backed by Ozawa, got 177 votes in the run-off, while Noda, supported by Ozawa critics, won the backing of 215 deputies.

Analysts said despite the defeat of his candidate, Ozawa remained a powerful – and divisive – force.

"He is still important, though not as important as he was," Temple University’s Kingston said.

Noda’s rise to the top job could cause some friction with China after he recently repeated that Japanese wartime leaders convicted by an Allied tribunal after Japan’s defeat in World War Two were not "war criminals" under domestic law.

He has also said China’s rapid military buildup and expanding naval activities pose a serious regional risk, and stressed the importance of the US-Japan security alliance.

"Noda’s attitude toward China has in the past been somewhat hardline, and he has close relations with the United States, which would not bode well for China-Japan ties," said Sun Cheng, an expert on Japan at the China University of Political Science and Law.

"However, he has been compromising on his views, and I think he will want to maintain stability in China-Japan relations," Sun added.

Bond markets welcomed the choice of Noda, who among the candidates was the only one consistently calling for Japan to face painful reforms to curb its massive debt.

"Let’s do the utmost to tackle what we have promised and if there’s not enough money, we might ask the people to share the burden," Noda said before the vote.

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