Maehara Enters Race for Prime Minister - Wall Street Journal

TOKYO—Former Japanese Foreign Minister Seiji Maehara said Tuesday he will run in a ruling party contest to replace Prime Minister Naoto Kan, throwing the race into turmoil with less than a week to go.

Mr. Kan is expected to formally announce his departure on Friday following the passage of a key renewable energy bill through parliament, a condition given by the embattled premier for his resignation. The opposition-controlled upper house is expected to pass the bill by Friday, allowing the ruling Democratic Party of Japan to hold a leadership contest on Monday.

Bloomberg News Seiji Maehara, Japan's former foreign minister,is the most popular candidate for prime minister in public polls with 28% support, according to Kyodo News.

Mr. Kan said he will likely dissolve his cabinet on Aug. 30 once a new DPJ leader is chosen, Economy Minister Kaoru Yosano said Tuesday. The leader of the ruling party usually becomes prime minister in Japan's parliamentary system.

Mr. Maehara, who is the most popular candidate in public polls with 28% support in a recent survey from Kyodo News, had until now thrown his support behind finance minister Yoshihiko Noda's informal bid. If Mr. Maehara wins, the 49-year-old will become Japan's youngest post-war prime minister.

Although Messrs. Noda and Maehara agree on most policies—fiscal discipline, slow and gradual fade-out of nuclear power, need for close collaboration with the opposition, strong U.S.-Japan alliance—they differ on tax policy.

Mr. Noda is pushing for core tax increases to fund disaster reconstruction, while Mr. Maehara wants to put tax increases on hold for the next couple of years for the sake of economic growth.

Mr. Maehara's bid will split the combined support base, boosting the influence of party kingpin Ichiro Ozawa's voting bloc of 100-plus lawmakers. Mr. Ozawa and his supporters are against raising taxes to pay for postquake reconstruction, instead looking to the Bank of Japan to underwrite government bonds for the Y19 trillion said to be needed for reconstruction over the next five years.

Mr. Maehara resigned as foreign minister days before the March 11 disaster, when it was revealed that he received political donations from a Korean supporter. Japanese law prohibits lawmakers from knowingly accepting money from foreign nationals.

Mr. Maehara's previous fall from grace took place in 2006, when he was the head of then-opposition DPJ. Mr. Maehara led a campaign against the son of a major Liberal Democratic Party lawmaker for having received illegal funds, only to have to step down when the allegations couldn't be proved.

Write to Toko Sekiguchi at toko.sekiguchi@dowjones.com

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Japan's Maehara likely to run for PM: media (Reuters)

TOKYO (Reuters) – Former Foreign Minister Seiji Maehara, who has called beating deflation a top priority, is likely to throw his hat into the ring to become Japan's next prime minister, media said on Monday, clouding the prospects of the fiscally conservative finance minister.

Unpopular Prime Minister Naoto Kan is expected this week to confirm his intention to resign, clearing the way for Japan to select its sixth prime minister since Junichiro Koizumi ended a rare five-year term in 2006.

Japan's new leader must grapple with a resurgent yen, push ahead with efforts to rebuild from the March earthquake and tsunami and end a radiation crisis at the crippled Fukushima nuclear plant -- all while figuring out how to curb a huge public debt and cure the ills of a fast-aging society.

"Foreign Minister Maehara has begun final coordination in preparation to run," the Jiji news agency reported, quoting unidentified party sources.

Finance Minister Yoshihiko Noda, a 54-year-old fiscal hawk, had hoped to win the backing of Maehara -- the most popular potential candidate among voters in recent polls -- in his push to replace Kan, a once-fiery civic activist whose approval ratings have slipped well below 20 percent since he took office in 2010.

"This changes the dynamic completely, although it doesn't give you the answer to who will win," Chuo University political science professor Steven Reed said of Maehara's expected decision to run in the Democratic Party (DPJ) leadership race.

At least five other DPJ lawmakers are eyeing a run at the nation's top job in the ruling party race, set for August 29 after the expected passage of two key bills now before parliament.

The new party leader becomes prime minister by virtue of the DPJ's majority in parliament's powerful lower house.

Whether and when to raise taxes to pay for rebuilding from the March disaster and to fund the bulging social security costs of a fast-aging society will be a focus of the party race, although even Noda has been toning down his stance of favoring raising taxes soon.

Maehara, a former DPJ leader who, like Noda, has expressed concern about giant rival China's military buildup, 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 said 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.

POWERBROKER OZAWA IN SHADOWS

Unless Noda, whose DPJ support base overlaps that of Maehara, 49, bows out of the race, low-profile Agriculture Minister Michihiko Kano, 69, could have a better chance of winning, not least because he may gain backing from party power broker Ichiro Ozawa and his ally, former premier Yukio Hatoyama.

Kano's lack of a clear policy stance on key issues also makes it easier to get support from various quarters inside the Democratic Party, which, like its main rival the Liberal Democrats, is split over economic and foreign policy matters.

"Because Kano lacks policies, he doesn't have enemies," DPJ elder Kozo Watanabe told Reuters in an interview on Friday.

Ozawa, a former party leader who some credit with engineering the Democrats' sweep to power in 2009, cannot himself run because his DPJ membership was suspended after he was indicted on suspicion of misreporting political donations.

"Ozawa and Hatoyama will join together and that could decide the outcome," said independent political commentator Hirotaka Futatsuki. "But the situation is fluid. It's not impossible that Noda and Maehara will decide that only one of them will run."

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 looked increasingly hard to keep Japan at its highest AAA rating.

($1 = 76.245 Japanese Yen)

(Editing by Alex Richardson)

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Maehara, Noda emerge as DPJ favorites

Former Foreign Minister Seiji Maehara and Finance Minister Yoshihiko Noda have emerged as the most favored among senior officials of the Democratic Party of Japan's 47 prefectural chapters to take the helm of the ruling party in place of Prime Minister Naoto Kan, according to a Kyodo News survey released Saturday.

Eight chapters threw their support behind Maehara in a multiple-answer question, although he has yet to clearly say he will run in the party presidential race planned for month's end. He was followed by Noda, 54, backed by seven chapters, and former transport minister Sumio Mabuchi, 50, who got support from three chapters.

In Tokyo's Nagata-cho political hub earlier in the day, former DPJ leaders Yukio Hatoyama and Ichiro Ozawa huddled, triggering speculation they will join forces in a bid to pick the ruling party's next chief and new prime minister.

While no details were immediately available about the meeting at the Diet, the two apparently discussed who Kan's successor should be and how to guide their factions to that end.

Kan, who has been badgered by months of vague opposition criticism that has carried over to the government's response to the nation's worst postwar crisis, has said he will leave office soon.

The Hatoyama-Ozawa talks followed trade minister Banri Kaieda's official entry into the DPJ contest Friday. The race, which would be impromptu, could take place on Aug. 28 or 29.

Kaieda, 62, met separately Friday with Hatoyama and Ozawa to get their factions' support.

The veteran Ozawa, whom Kan defeated in the scheduled presidential election last September, has about 120 fellow DPJ lawmakers behind him. The winners of scheduled DPJ polls are effectively in for two-year terms.

On a Saturday morning TV program, Mabuchi hinted he might seek to reverse the suspension of Ozawa's DPJ membership if he is elected party leader. Ozawa was stripped of his membership after his indictment for allegedly participating in the falsification of fundraising reports drafted by his secretaries.

"If a new fact emerges, the new leader can judge from that fact," Mabuchi said in the apparent overture.

Other prospective candidates, including Kaieda, have also voiced the possibility revoking the decision to suspend Ozawa.

But some members are distinctly opposed to the move.

"The decision was made after discussions in the party's executive bodies," said Shu Watanabe. "If we (flip-flop) we will lose the public's trust."

Ex-Environment Minister Sakihito Ozawa, 57, and Shinji Tarutoko, 52, former chairman of the Diet Affairs Committee, have also shown a desire to enter the race.

Some members have also been trying to get farm minister Michihiko Kano, 69, to run.

Hatoyama also held talks Saturday with Noda and Kano on the DPJ race.

Noda, who has claimed a tax hike is necessary to fund disaster reconstruction, said he will be flexible on the timing of any increase.

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Kaieda set to run; Maehara undecided

Trade minister Banri Kaieda has decided to run for president of the Democratic Party of Japan to replace Prime Minister Naoto Kan and will officially announce his candidacy Friday, party sources said Thursday.

Kaieda is expected to resign as industry minister to take responsibility for the confusion that erupted over whether to restart the reactors at the Genkai power plant in Saga Prefecture.

He also is waiting to ensure the Diet passes a bill for promoting renewable energy in light of the Fukushima nuclear crisis. The bill's passage is expected by the end of the month.

Meanwhile, former Foreign Minister Seiji Maehara has re-emerged, with relatively high public support ratings, as another potential candidate to succeed Kan but remains undecided about whether to throw his hat into the ring, his allies said.

Maehara has received relatively stronger support for a leadership bid than the other potential candidates, public opinion polls show.

Maehara's allies said he will decide whether to run in the not-too-distant future. The winner would be expected to replace Kan as prime minister.

Maehara's supporters, however, are divided over whether he should be a contender. Some have said he should not seek the top post, which he once held before the DPJ came to power, given that he resigned as foreign minister in March over accepting donations from a foreign national — a Korean resident of Japan with a Japanese name. They are urging him to wait until the party holds its regular presidential election in September next year.

Coming out of his group's meeting, Maehara told reporters he is glad some of his allies want him to run.

"I take it seriously. I'll decide after consulting with my fellow party members," he said.

Other potential DPJ candidates in the looming poll include Finance Minister Yoshihiko Noda, farm minister Michihiko Kano and former transport minister Sumio Mabuchi.

Noda spoke Wednesday night with Maehara and asked for his intraparty group's support in the election, a source said.

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Maehara opposes reconstruction tax hike

Former Foreign Minister Seiji Maehara said Sunday he is still undecided on whether to run in the coming ruling party leadership race to replace Prime Minister Naoto Kan, but clarified his reluctance to see a tax hike to finance reconstruction from the March disaster.

On whether to seek a grand coalition with the two main opposition parties to break the gridlock in the divided Diet, Maehara, speaking on a TV program, called for a time-limited coalition, for about a year, with the Liberal Democratic Party and its ally, New Komeito.

The ruling Democratic Party of Japan has a majority in the powerful House of Representatives but the opposition parties control the House of Councilors.

Maehara's position on the proposed tax hike differs from that of Finance Minister Yoshihiko Noda, who is seen as a leading candidate for next DPJ chief. But the two men share the stance of seeking cooperation from the LDP and New Komeito by inviting them into the Cabinet.

Noda reiterated on a different TV program the need to raise taxes for reconstruction from the March 11 earthquake and tsunami in line with the government's initial proposal, which has been deferred due to opposition from within the DPJ.

He also signaled his willingness to let Japan join the U.S.-led Trans-Pacific Partnership free-trade talks, while calling for an early decision on whether to do so following postponement of the issue in June in the wake of the March earthquake and tsunami.

"We are one lap behind South Korea and China in terms of high-level economic partnerships," Noda said, adding, "Moves since the change of power (to the DPJ-led administration in 2009) have been to catch up on the delay, and the TPP is within the range."

On the possible grand coalition, Noda indicated Saturday he would seek one with the LDP and New Komeito, but former transport minister Sumio Mabuchi, who also plans to run in the race, called Saturday for a "realistic approach" in light of negative reactions to the idea from the two parties, making the matter a major DPJ election issue.

Maehara, a former leader of the DPJ, said a grand coalition "should be realized for about a year by deciding policies."

But he said he has a "clean slate" on the question of whether he will run in the leadership contest to be held after Kan steps down, a move expected late this month. "I would like to make a decision after consulting with my colleagues," he said.

Separately on Sunday, DPJ Secretary General Katsuya Okada hinted at the possibility of Kan's successor launching a new government in September, not at the end of August as widely expected.

If the next DPJ chief seeks to form an alliance with the LDP and New Komeito, the launch of the new government may be delayed until September, when the Diet is expected to reconvene, since it may take time to coordinate policies with the two major opposition parties before the next Cabinet debuts.

He denied the possibility of himself running in the presidential race.

Japan has issued a visa to former Thai Prime Minister Thaksin Shinawatra, Chief Cabinet Secretary Yukio Edano said Monday.

Thaksin, who served as Thai prime minister between 2001 and 2006 before being deposed in a military coup, now lives in exile in Dubai.

Thaksin has been hoping to visit Japan from Aug. 22 to 28, during which time he intends to visit areas in Miyagi Prefecture devastated by the March 11 earthquake and tsunami, his supporters said.

Edano said in a news conference that the government issued the visa Sunday after making a "comprehensive" judgment on the request from the Thai government to allow entry to Thaksin.

Japan's move comes after Thaksin's youngest sister, Yingluck Shinawatra, was officially sworn in as the new prime minister of Thailand last week.

Edano said the government decided to allow Thaksin entry after the new Thai administration said it plans to lift Thaksin's travel ban.

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