Asia-Pacific

Weary Japan finmin wants to quit, PM says stay

(Agencies)
Updated: 2010-01-05 20:01

TOKYO: Japanese Finance Minister Hirohisa Fujii offered to resign for health reasons but the prime minister asked the veteran lawmaker to stay on to steer the fragile economy to recovery, local media reported on Tuesday.

Weary Japan finmin wants to quit, PM says stay

Japanese Finance Minister Hirohisa Fujii speaks during a news conference in Tokyo in this December 17, 2009 file photo. [Photo/Agencies]

Fujii, 77, is an advocate of fiscal discipline and one of the few experienced members of cabinet. His health problems have added pressure on the novice Democratic Party-led government as it wrestles with deflation, a weak economy and huge public debt.

Fujii, who has high blood pressure, said earlier he was still waiting for final results of medical tests after being hospitalised last week suffering from exhaustion.

Private broadcaster NTV reported that Fujii had told Prime Minister Yukio Hatoyama that he wanted to resign because he was worried he could not cope with day-long questioning in parliament when it convenes around Jan. 18.

But Hatoyama said he wanted Fujii to stay on.

"Of course, I want him to keep doing his best," Hatoyama told reporters.

Fujii said earlier that results of his medical tests may be available shortly, and that a decision on whether he should stay in the post should be made before parliament convenes.

Some analysts said Fujii is likely to quit and Hatoyama wants time to find a successor.

Doing so will be difficult given the shortage of Democratic Party lawmakers who have both expertise in budgetary matters and the political clout needed to resist pressure to spend more on economic stimulus projects, which would inflate the already huge public debt.

"The market had a sense of trust in the government because of Fujii's leadership in compiling the budget," said Toshihiko Sakai, manager of foreign exchange trading at Mitsubishi UFJ Trust Bank.

"The budget is already put in shape, but a lack of Fujii's leadership could mean political unstability in the future and is therefore negative for Japanese government bonds."

Fujii said last week he was worn out by wrangling about how to finalise the budget. He has been in the post for a little over three months.

"I don't know what the results of the medical tests will be. But they should be available soon," Fujii told a news conference, adding he would respect the advice of his doctors.

Often serving as the voice of fiscal restraint, Fujii was the main proponent of sticking to a cap of around 44 trillion yen ($476.8 billion) on new bond issuance in the budget for the year from April as the government looks to contain a mountain of debt.

"If Fujii were to step down, markets are likely to start worrying that his successor would call for expansive fiscal spending to achieve the government's growth target," said Seiji Adachi, senior economist at Deutsche Securities.

"Even if Fujii stays on, he may not be able to push for fiscal discipline further given his health problems."

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