Fukushiro Nukaga resigned as Japan's economics minister yesterday over a bribery scandal, dealing another serious blow to the government of unpopular Prime Minister Yoshiro Mori.
"I could not create any more trouble for the Cabinet and parliament," Nukaga, who had come under fire from political opponents and key figures within the ruling Liberal Democratic Party (LDP), said as he emerged from the prime minister's residence.
"I deeply apologize to the public."
Nukaga was the third minister to leave the Mori Cabinet since the prime minister took office nearly 10 months ago. His departure comes as Mori's approval ratings languish near record lows.
Nukaga was replaced by former Economic Planning Agency chief Taro Aso, 60, a six-term lawmaker with an elite political pedigree. His grandfather was Japan's first postwar prime minister, Shigeru Yoshida.
Aso is not expected to take an aggressive approach to structural reforms, which many say are need ed to pull the economy out of a decade of stagnation.
Signs that Japan's long-sought economic recovery is faltering are mounting, but Aso toed the government line in his first news conference after his appointment. "The economy continues on a recovery trend, albeit slowly," he said.
Asked whether the government should begin reining in the government's massive debt, he added: "For the time being, it is important that economic growth does not drop off."
Analysts believe Nukaga's departure could set the stage for political gridlock at a critical time for the faltering economy.
Scandals involving LDP lawmakers will also have deep political ramifications for the party as it heads into an Upper House election in July under the leadership of the gaffe-prone prime minister.
In a poll released on Monday by the Nihon Television network, only 16.4 percent of respondents said they supported Mori's government, while the disapproval rate was 68.9 percent.
A survey by the national daily Asahi Shimbun showed 64 percent of respondents thought the pro-business LDP would be unable to win July's Upper House election with Mori at the helm and with scandal dogging his steps.
In a statement issued after his resignation, Nukaga said he had received contributions totaling ?15 million (US$128,200) from small-business insurer KSD, which is at the center of a brewing bribery scandal.
The debacle surrounding Nukaga and the absence of any clear alternative to Mori have cast greater uncertainty over the policy outlook in the world's second-largest economy.
Policymakers are debating measures to try to halt a slide in Tokyo's stock market, where the benchmark Nikkei average has lost about one-third of its value in the last nine months.
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