Hatoyama quits under party pressure

Yukio Hatoyama, Japan’s prime minister, on Wednesday announced he would step down together with ruling Democratic party heavyweight Ichiro Ozawa, bowing to pressure from colleagues fearful of an impending rout in next month’s Diet upper house election.

Japanese analysts and media immediately dubbed Naoto Kan, the finance minister, the clear frontrunner to succeed Mr Hatoyama as standard bearer for the DPJ’s bold attempt to remake Japanese politics by curbing the power of bureaucrats and stressing cabinet-led policymaking.

The departure of Japan’s fifth prime minister in four years offers the DPJ a chance to stem the stunning decline in support it has suffered since winning a historic general election victory over the long-ruling Liberal Democratic party.The departure of the prime minister less than a year after he led the Democratic party to a historic general election victory over the long-ruling Liberal Democratic party could have far-reaching implications for the development of Japanese politics.

The DPJ had been steadily losing momentum for its ambitious effort to reshape politics and policy in east Asia’s most influential democracy since Mr Hatoyama formed his government last September.

However, it is likely to raise concerns in the US by throwing into doubt the prospects for implementation of a controversial deal to relocate a US marine base on the southern island of Okinawa that was a major factor in Mr Hatoyama’s fall.

Mr Hatoyama’s departure is also likely to spell the end of Japan’s calls for work toward the creation of an “East Asian Community” modelled on the EU, a goal stressed by the Europhile premier.

In an emotional speech, Mr Hatoyama highlighted the political damage from scandals involving his fundraising body – which did not report huge fund transfers from his wealthy mother – and that of Mr Ozawa, the DPJ secretary general seen by many as a “shadow shogun” pulling government strings from behind the scenes.

Announcing his intention to resign, Mr Hatoyama said that he had asked Mr Ozawa to step down too.

“I told him that in this way we can create a new DPJ, a cleaner DPJ,” the prime minister said. “The secretary general said he understood.”

Mr Hatoyama also apologised for his failure find a new site for the Futenma US marine base in Okinawa, an effort that had badly strained ties with Washington. Mr Hatoyama’s belated acceptance of the plan to move the base to a scenic Okinawan bay pleased US officials but outraged local opinion and split his coalition government.

While analysts say Mr Hatoyama’s successor will be determined to prevent the Futenma dispute continuing to dominate the domestic agenda, many doubt that the next leader will be keen to override local opposition to actual construction.

“Congratulations US government, you have just concluded an agreement with someone who will not even be around long enough to get a copy of the agreement text via the post,” wrote political analyst Michael Cucek on his Shisaku blog.

Tokyo’s financial markets were mostly unmoved by Mr Hatoyama’s decision to resign amid expectations that his replacement will not stray far from existing economic policies.

But the yen weakened slightly against the dollar because front-runner Mr Kan has publicly favoured a weaker currency. By mid afternoon in London, the yen had extended its losses, down 1.1 per cent to Y91.94 versus the dollar.

DPJ officials said party Diet members would vote on a new leader on Friday with a new cabinet to be formed early next week, a tight schedule seen as favouring Mr Kan although it is likely to mean he must miss a weekend G20 finance ministers’ meeting South Korea.

Takao Toshikawa, a political analyst, said Mr Kan could face a challenge from DPJ colleagues who worry he would be too tolerant of continuing influence by Mr Ozawa and who might rally behind Katsuya Okada, the foreign minister.

Stephen Smith, Australia’s foreign minister, said Mr Hatoyama had helped strengthen security and strategic ties between the two nations. “Prime minister Yukio Hatoyama has been a good friend of Australia … we wish him well for the future,” Mr Smith told parliament, adding the government looked forward to working with his successor.