x Abu Dhabi, UAEWednesday 26 July 2017

Japanese shares fall after PM quits

The Japanese economy is staring into the unknown after the shock resignation of the prime minister Yasuo Fukuda.

The former foreign minister Taro Aso, left, with the outgoing prime minister Yasuo Fukuda.
The former foreign minister Taro Aso, left, with the outgoing prime minister Yasuo Fukuda.

The Japanese economy is staring into the unknown today after the shock resignation of the prime minister Yasuo Fukuda and signals that the outspoken conservative Taro Aso is eyeing the job. Mr Fukuda made his shock announcement yesterday after less than one year in office, saying he was overwhelmed with the mounting problems besetting Japan, which is teetering on the brink of recession. The new political uncertainty led to a late sell-off on the Stock Exchange, whose benchmark index slumped 1.75 per cent to its lowest in five months.

Mr Fukuda remains in office until his governing Liberal Democratic Party (LDP) meets to elect his replacement as leader. That is expected to be on Sept 22, after which parliament would formally endorse the new premier. Mr Aso, a flamboyant former foreign minister known for his love of comic-book culture, made little secret that he wants to be premier. "Mr Fukuda said last night that he wanted a successor to take over what he has done," Mr Aso, currently the LDP's secretary general, said. "I believe that I am qualified to take over Mr Fukuda's agenda, including the emergency economic package," he said, referring to an 11.7-trillion-yen (Dh393bn) stimulus plan unveiled on Friday. Mr Aso, 67, is a former rival of Fukuda and is known for his hawkish views on foreign policy. He is considered more conservative than the 72-year-old outgoing premier, who helped repair historically uneasy relations with China. Mr Fukuda's popularity plummeted as his government introduced a deeply unpopular medical plan, suffered a series of scandals and tussled with an opposition set on blocking its legislative agenda. The resignation revived memories of Shinzo Abe, another LDP prime minister who suddenly quit in September last year. Mr Abe was widely criticised as being irresponsible, including by Fukuda himself. Mr Fukuda apologised at the start of an LDP meeting on Tuesday, Mr Aso said. People in the streets snapped up late-night extra newspaper editions after the announcement, some voicing shock or worries for the economy. "I had been expecting something to change on the economic front," Hideyuki Kato, a 47-year-old salesman in central Tokyo, said. "But I don't have any expectations from politics now." Mr Fukuda's LDP has been in power for all but 10 months since its creation in 1955. * AFP