Japan finance chief quits over alleged drunkenness
TOKYO (AP) — Japan's finance minister resigned in disgrace Tuesday after slurring his speech and nodding off during the G-7 summit in Rome last weekend in yet another political distraction as the world's No. 2 economy battles an ever-deepening recession.
Finance Minister Shoichi Nakagawa denied he was drunk on the job and blamed his bizarre behavior at a press conference in Italy on cold medicine and jet lag, but friends and foes alike weren't buying his excuse.
It was the latest blow to the beleaguered government of Prime Minister Taro Aso, whose support ratings fell into the single digits in a recent poll, increasing speculation his days might be numbered.
Opposition lawmakers lodged a censure motion against Nakagawa after he returned to Tokyo and demanded he quit immediately. "He embarrassed himself in front of the world," said opposition leader Ichiro Ozawa.
Fellow Cabinet member Seiko Noda called the incident "shocking."
"A Cabinet minister must be fit, and he needs more self control," said Noda, Japan's minister in charge of consumer affairs.
Japan could hardly afford another political or economic misstep. Unemployment is climbing, consumer spending is falling, and companies are seeing deep red as the global financial crisis takes a particularly heavy toll on this export-reliant nation.
Last quarter, the economy shrank at its fastest pace in 35 years and is now in its worst downturn since the end of World War II. The key stock index has shed 44 percent of its value over the past year.
Video footage of his Rome press conference showed Nakagawa, 55, confused, drowsy and stumbling over words. He said he took cold medicine, which, along with jet lag, made him groggy.
"I decided that it would be better for the country if I quit," said Nakagawa, one of Aso's closest political allies.
The finance minister's abrupt announcement, coming as Tokyo hosted Secretary of State Hillary Rodham Clinton, was seen as an attempt at damage control, but some analysts said they expect the situation to get tougher for Aso in the weeks ahead and political gridlock to worsen.
"The scandal was so humiliating that Nakagawa's resignation will not be enough," said political analyst Minoru Morita. "The opposition will now shift their target to Aso, pushing him deeper into the corner."
Economy Minister Kaoru Yosano, 70, will add Nakagawa's duties to his role, Aso said after accepting his resignation. "He made a difficult choice, and I respect his decision," said the prime minister.
Nakagawa's political demise was expected to further embolden the opposition, which controls the upper house of parliament and could try to hold bills hostage.
Along with a moribund economy and increasing joblessness, the scandal was the latest in a series of embarrassments that have plagued Aso.
The ruling party has tried to hold elections off and ride out the scandals. Several polls suggest that the opposition has a good shot at winning if elections are held soon, although the Liberal Democrats have controlled the government for virtually all of the past 54 years.
Elections must be held by the end of September, but can be called at any time.
"If elections were held right now, the opposition would win," said Takao Toshikawa, another political analyst.
On Monday, Japan announced its economy shrank at its fastest rate in 35 years in the fourth quarter. It has now contracted for three straight quarters and is almost certainly headed for a fourth.
To revive growth, Japan's parliament passed a contentious 4.8 trillion yen ($52.2 billion) extra budget in January that includes business tax credits and a cash payout of 12,000 yen ($133) per Japanese taxpayer. Aso has championed the idea, saying it will stimulate sagging consumer spending.
But critics have panned the handouts as a lavish waste of public money with limited impact. The resulting political wrangling has delayed implementation of the stimulus measures, which still await parliament passage of some related bills.
For investors, there is hope in Aso's looming political demise, said Yoshinori Nagano, senior strategist at Daiwa Asset Management in Tokyo.
"Stock prices tend to reflect the level of confidence in the Cabinet," Nagano said. "So with approval ratings so low right now, the market would be much better off if the Aso administration just dissolved."