Wall Street Journal
By JAMES SIMMS
Another Japanese prime minister is caught in the spiral that's ensnared so many of the nation's leaders in recent years: Yukio Hatoyama's public support is plunging, thanks in part to his administration's dawdling on important issues. The further his ratings fall, the less Mr. Hatoyama can achieve.
Investors aren't flummoxed yet. Instead, buoyed by a weakening yen and a strengthening global economic recovery, they're happily buying Japanese stocks. Bonds are holding up too, helped by the fact that Japanese banks have few other places to park their money.
But politics will get their attention soon enough. In July voters will elect members of Japan's Upper House. If, as seems increasingly likely, Mr. Hatoyama's Democratic Party of Japan is left without a majority in that body, then coalition-building, rather than governing, will become the watchword. The muddling along could continue for an eternity in Japanese politics: The nation could go without a national election for up to three years after July.
Already, minor coalition parties are wielding an inordinate amount of power over the government, complicating Mr. Hatoyama's efforts to deliver on a promise to resolve by the end of May the relocation of a U.S. military base in Okinawa. Banking minister Shizuka Kamei, a particularly outspoken coalition partner, boasted that he has "veto" power over the administration.
Meanwhile, flip-flopping among the Democrats makes it difficult to know where economic policy is heading. Consider two campaign promises, made last year, to eliminate tolls on roads and end wasteful construction. Those promises, at least until last week, had mutated into a plan to raise tolls on some drivers who currently enjoy discounts while spending as much as $15 billion on more highways to nowhere.
That cash for road construction is small beans compared with the larger fiscal overhaul issue facing Japan. The government is expected to unveil a fiscal-deficit reduction plan in June. In theory this would include specific targets for attaining a primary fiscal balance and cutting the industrialized world's highest debt-to-gross domestic product ratio.
At stake is the cost of Tokyo's massive debt burden. Early this year Standard & Poor's lowered its outlook on Japan's sovereign debt rating from stable to negative, saying Tokyo wasn't acting as quickly as expected. That was before the government was in its current political mire. A poll by the Nikkei business daily released this week shows that support for the cabinet nosedived last month to 24% from 36%. At this rate, the Hatoyama administration may not last long enough to unveil any reform plans.
Leaving the question: Who will be the next prime minister to watch history repeat itself?