Japan’s sixth PM in five years steps up

City A.M. Reporter
JAPAN’S sixth prime minister in five years was chosen yesterday. Yoshihiko Noda, formerly the finance minister, replaces former PM Naoto Kan and faces an uphill battle to overcome a divided parliament and deep rifts in the ruling party.

Noda appears to be a safe pair of hands to lead the world’s third-biggest economy but there are serious doubts whether he will have sufficient support to tackle Japan’s myriad economic woes, lift it out of decades of stagnation and cope with a nuclear crisis.

The 54-year-old Noda (pictured), who defeated trade minister Banri Kaieda in a run-off vote in the ruling party, must deal with a resurgent yen that threatens exports, forge a new energy policy while ending the worst nuclear crisis since Chernobyl, and find funds to rebuild from the 11 March tsunami at a time when huge public debt has already triggered a credit downgrade.

Nonetheless, his appointment has been largely welcomed in financial circles. “Mr Noda is the right choice for Japan,” said Societe Generale yesterday, in a note.

“Mr Noda has done an excellent job as a finance minister. In particular, we would give a high mark on his handling of exchange rate policy -- despite the financial turbulence in the past one month, the level of yen against USD is hardly changed from a month ago.”

“He seems to be the safest choice, and I mean this in a good way. There seems to be a continuation in policy as he served as finance minister,” added Tomomichi Akuta, senior energy researcher at Mitsubishi UFJ Research and Consulting in Tokyo.

Yet no Japanese prime minister has lasted much more than a year since 2006 and many analysts expect Noda’s rule to be doomed before it has begun.

Noda, who will be confirmed by parliament today, will be the third premier since his ruling Democratic Party of Japan swept to power in 2009, promising change.

“I have said let us end the politics of resentment.”
Even before yesterday’s leadership vote, Noda had called for a grand coalition with the main opposition parties to break the parliamentary deadlock. The 54 year old judo-loving PM has pledged “middle-of-the-road” politics, in a bid for consensus.

“A loach has its own abilities even though it cannot do as a goldfish does.”
Having been raised in a modest household on the outskirts of Tokyo, the self-deprecating Noda has made fun of his unglamorous appearance – likening himself to an eel-like fish that lurks among rocks, rather than the flashy-scaled goldfish. “It’s the reason why I do not look like a city boy,” he added.

Tax rises must consider “the impact on the economy”
Despite having a reputation as a fiscal conservative, keen to begin tackling the Japanese government’s Godzilla-like debts, Noda has already shown room for compromise, suggesting that tax hikes will not be forced through.

“Gritting our teeth, let’s create a stable, reliable and mature politics.”
In a country desperate for stability, Noda seems like the sensible option. Some commentators say Japan needs a maverick like Junichiro Koizumi, the last premier to serve a full term in 2001-2006, to jolt Japan out of decades of stagnation and political paralysis. Others say, however, someone like Noda, modest, calm and with few enemies, has a better chance to achieve something in a divided parliament than a charismatic figure. A fan of pro-wrestling, Noda has projected an image of a straight shooter, saying he is not good at playing “underhand tricks” in politics.