Kan can't

The ruling Democratic Party of Japan (DPJ) has said it would conduct an internal election on August 29 to choose the next leader to succeed outgoing Prime Minister Naoto Kan. The DPJ would hold public debates among candidates on Sunday, party Secretary General Katsuya Okada said.

Whether and when to raise taxes to pay for rebuilding after the March earthquake and tsunami disaster and to fund the bulging social security costs of a fast-ageing society will be a focus of the party race.

Former Japanese Foreign Minister Seiji Maehara, who has called tackling deflation a top priority, is likely to throw his hat in the ring to become the next prime minister, Jiji news agency said on Monday, clouding the chances of Finance Minister Yoshihiko Noda, who had hoped to win Maehara's support.

Maehara, a former DPJ leader, like Noda, has expressed concern about giant rival China's military buildup. He topped the list of voters' preferred candidates in a Kyodo news agency survey, with 28 percent against a mere 4.8 percent for Noda. But political analysts say Maehara's popularity was no guarantee that he would win the DPJ race, in which only DPJ members of parliament and not rank-and-file members take part.

Great challenges

Whoever wins the premier's job faces urgent challenges – chiefly to rebuild from Japan's worst post-war disaster while keeping in check a public debt mountain that is already twice the size of the economy.

Kan, Japan's fifth premier in as many years, has been expected for weeks to announce his resignation amid stinging criticism over his response to the March 11 disaster and the Fukushima nuclear crisis. The approval rating for Kan's cabinet has fallen to 15.8 percent, the lowest since he took office in June 2010, according to a poll released Sunday by the Kyodo News agency.

The passage of two key bills will fulfill all the conditions that Kan set for his departure. One bill, on government issuance of deficit-covering bonds, is expected to be approved Wednesday, while the other to promote the use of renewable energy sources is likely to be enacted on Friday.

Poor management

Kan's government has been accused of a slow and inappropriate response to the March 11 earthquake and tsunami and the ensuing nuclear accident at the Fukushima Daiichi Nuclear Power Station. The natural disaster left some 15,700 dead and 4,600 missing.

Almost six months after the quake, tens of thousands of people remain in evacuation centers because of the tsunami and the Fukushima accident, which alone forced more than 80,000 people from their homes.

Some areas close to Japan's crippled Fukushima nuclear plant will likely remain no-go zones for an "extended period of time – possibly for several decades," a media report citing an unnamed government official has recently said.

Divided parliament

Since the Fukushima accident, 64-year-old Kan has strongly advocated a nuclear-free future for Japan, a position that has put him at loggerheads with the conservative opposition and some members of his own party. Kan and his four short-lived predecessors have all struggled to implement policies in the face of a divided parliament, where the opposition controls the upper house and can block bills.

The political paralysis is threatening to further undermine Japan's sovereign credit rating. Standard & Poor's already has Japan on an AA-minus rating with a negative outlook. And Japanese credit agency R&I said on Monday it was getting increasingly hard to keep Japan at its highest AAA rating.

Author: Sarah Berning (Reuters, AFP, dpa)
Editor: Manasi Gopalakrishnan