Japan PM says wants to keep coalition despite rift

Japanese Prime Minister Yukio Hatoyama said on Saturday he wants to maintain the ruling coalition even after firing the leader of a small allied party from her cabinet post.

Mizuho Fukushima, ousted as consumer affairs minister on Friday, suggested her Social Democratic Party (SDP) was unlikely to stay in the ruling bloc ahead of an upper house election expected in July.

Hatoyama fired Fukushima for resisting a U.S.-Japan deal on a Marine airbase on southern Okinawa island, widening a rift in his coalition as the election draws near.

His decision to give up on a pledge to shift the U.S. Marines’ Futenma airbase off the island has angered Okinawans, upset the leftist SDP, and further eroded support for Hatoyama’s government over perceived mishandling of the issue.

“To have fired me is to abandon the Social Democratic Party,” Fukushima was quoted by Japanese media as saying.

“We need to make an important decision,” she said.

An SPD departure would be ill-timed for Hatoyama’s Democratic Party ahead of the upper house election, which the Democrats must win to avoid policy stalemate.

But it would not topple the government because the Democrats have a huge majority in parliament’s more powerful lower house.

“I would like to ask the SDP for continued cooperation,” Hatoyama told reporters when asked about Fukushima’s comments.

“I would like to maintain the ruling coalition. But it is up to the SPD to decide, so we need to wait for the meeting of their local leaders,” he said.

Some Social Democrats want the party to leave the coalition, others want to stay in power to influence policy. The party will hold a meeting of representatives of local leaders on Sunday.

Hatoyama is in Seogwipo, a honeymoon resort on the South Korean island of Jeju, to attend a regional summit with leaders from China and South Korea.

(Reporting by Yoko Nishikawa; Editing by Paul Tait)

Japan ruling bloc risks splitting over U.S. base

Japan’s ruling bloc was at risk of break-up on Friday after Tokyo and Washington agreed to keep a controversial U.S. airbase on Okinawa island, further denting the coalition’s chances of a decisive win in a mid-year election.

Prime Minister Yukio Hatoyama’s decision to abandon a pledge to move the U.S. Marines’ Futenma base out of Japan’s southern Okinawa island has upset the tiny leftist Social Democratic Party (SDP), whose leader, Consumer Affairs Minister Mizuho Fukushima, has rejected the deal.

Analysts said Hatoyama was likely to cling to his job.

But his support ratings, which have already sunk to around 20 percent on doubts about his leadership, look likely to fall further on the latest fuss, which has distracted the government as it tries to thrash out mid-term plans for cutting huge public debt and engineering growth despite a fast-ageing population.

In a statement stressing the need to keep U.S. troops in Japan to deter threats, the foreign and defence ministers of the two allies said Futenma’s functions would be shifted to the Henoko area of the northern Okinawa city of Nago and nearby waters, largely in line with a 2006 deal.

Hatoyama, who took office promising a diplomatic stance less dependent on close ally Washington, has underlined the need for tight U.S.-Japan ties since the sinking of a South Korean naval ship by North Korea. But the pacifist Social Democrats want the base off the island, host to about half the U.S. forces in Japan.

“This is not just an issue for the SDP and the cabinet. Politics must fulfil the promise it made to the people of Okinawa and the rest of Japan on (addressing the) excessive burden on Okinawa,” Social Democratic Party leader Mizuho Fukushima told reporters, repeating that she would not sign off on the deal.

SPLIT WOULD BE ILL-TIMED

Some SDP members want the party to leave the coalition if their demand is not met. The party will discuss on Sunday whether to bolt, Kyodo news agency reported.

A split would be ill-timed for Hatoyama’s Democratic Party ahead of an upper house election expected in July, but would not be fatal for the government since the Democrats have a huge majority in parliament’s more powerful lower house.

For a graphic on Japan voter support, click http://r.reuters.com/myv63g

For a graphic on voting intentions, click http://link.reuters.com/jev83j

The Democrats could lose SDP cooperation in the upcoming election campaign, further undermining their chances of winning the outright majority needed to avoid policy paralysis.

Some analysts say the SDP’s departure could make it easier for Hatoyama to make decisions by reducing policy gaps among coalition partners.

But whatever the outcome of the coalition feud, Hatoyama’s image looked certain to suffer an added blow among voters, many of whom will be wondering why he raised Okinawans’ hopes only to dash them eight months later.

“Many Japanese outside Okinawa are less perturbed by the deal than concerned why he raised it in the first place if he didn’t have a plan,” said Jeffrey Kingston, director of Asian studies at Temple University’s Japan Campus. “All the goodwill he had when he came into office has been squandered.”

Nor will implementing the U.S.-Japan agreement be easy now that the anger of Okinawans has been roused.

“People are saying it is back to square one, but I think it’s square one minus a lot,” Kingston said.

“He has angered the Okinawans, the Americans, people in his own party and his coalition partner with this poorly planned project.”

(Editing by Sugita Katyal)

Clinton warns North Korea, lauds Japan alliance

U.S. Secretary of State Hillary Clinton “strongly condemned” North Korea’s sinking of a South Korean naval ship during a brief visit to Tokyo, where U.S. and Japanese officials sought to paper over a military base dispute.

South Korea accused the North on Thursday of torpedoing one of its warships, heightening tension in the economically powerful region and testing the international position of China, Pyongyang’s only major backer.

Seoul said after a rare emergency security meeting earlier in the day that it would respond prudently to the sinking of its ship, but Pyongyang warned the peninsula was being driven to war.

“I think it is important to send a clear message to North Korea that provocative actions have consequences. We cannot allow this attack on South Korea to go unanswered by the international community,” Clinton said.

“So we will determine our best options and send a clear, unmistakable message to North Korea regarding the international community’s and most particularly, its neighbours’ concerns about its behaviour.”

A feud over the U.S. Marines’ Futenma airbase on Japan’s Okinawa island has distracted the allies as they try to cope with an unpredictable North Korea and a rising China.

Japanese voter perception that Prime Minister Yukio Hatoyama has mishandled the issue is eroding support before a midyear election his party needs to win to avoid policy paralysis.

But Clinton and Japanese Foreign Minister Katsuya Okada stressed that the 50-year-old alliance was solid and more important than ever, and Okada said the U.S. troop presence in Japan was vital.

“I want to explain frankly to the Japanese people that the presence of U.S. troops in Japan is indispensable to Japan’s security and to the peace and stability of the region in the current security environment,” he told a joint news conference after his meeting with Clinton.

(Additional reporting by Chisa Fujioka; Editing by Chris Gallagher)

Japan ex-health min to form new party ahead of poll

Japan’s popular former health minister, Yoichi Masuzoe, left the main opposition party on Thursday to form the latest in a string of new groups complicating the outlook ahead of a national election.

Even as the once-mighty Liberal Democratic Party (LDP) unravelled further, a fresh policy fracas emerged in Prime Minister Yukio Hatoyama’s ruling camp, this time over a plan to revise highway tolls that some critics say would contradict a campaign pledge to make expressways toll-free.

The departure of Masuzoe, 61, who tops opinion polls as the lawmaker voters prefer as next premier, is a blow to the LDP, ousted from power last year after more than 50 years of almost unbroken rule.

But it is uncertain whether the fragmentation of the pro-business LDP helps Hatoyama’s struggling Democratic Party of Japan (DPJ) in an upper house election that it needs to win to smooth policy making as Japan struggles with a fragile economy and bulging public debt.

Support for Hatoyama’s government has sunk to around 30 percent in recent polls on doubts about his ability to make tough decisions, including how to resolve a feud over a U.S. airbase on Okinawa island by the end of May.

Even some people in his own party have said Hatoyama might have to resign if he fails to meet his self-imposed deadline.

Graphic on Japan voter support: http://r.reuters.com/myv63g

Graphic on voter intentions: http://link.reuters.com/jev83j

“It’s not good for the LDP. It’s not good for the opposition generally,” said Koichi Nakano, a professor at Sophia University in Tokyo.

“If it leads to the creation of a new opposition force, it could be a challenge to the Democrats but for now, a fragmented opposition must be good news for them.”

Masuzoe, a multilingual former academic and one-time TV commentator, told reporters on Thursday that he would submit a letter of resignation from the LDP later in the day.

Asked what would be his new party’s principles, Masuzoe said: “That will be in line with what I have been saying for a long time, including overcoming deflation, clean money politics … and boosting Japan’s competitiveness and status in the world, which were hurt by a weak economy.”

HATOYAMA’S HEADACHES

Japanese media were quick to note that lawmakers expected to join Masuzoe’s new party did not all share his policy stance. Instead, they include lawmakers from a minor opposition party whose own seats are at risk in the upper house election, expected in July.

Hatoyama’s own headaches, meanwhile, are steadily worsening and prospects for a decisive victory in the upper house, which can delay legislation, are slim to non-existent, analysts say.

In the latest sign of policy disarray, Hatoyama told reporters the government would rethink a plan to revise highway tolls that would result in some fees rising, after what Japanese media said was a demand by ruling party kingpin Ichiro Ozawa to alter the proposal because it violated a campaign pledge.

But Transport Minister Seiji Maehara, a former party chief who is often critical of Ozawa, said after a meeting with the premier that the plan would not be changed “at this time”.

A former close aide to Hatoyama, who had pleaded guilty to charges of falsifying political fund records, was sentenced on Thursday to two years’ imprisonment, suspended for three years. But the court ruling made no mention of involvement by the premier, Japanese media reported.

Media say judicial review panels are set to hand down decisions soon on whether the premier and Ozawa should be indicted in political funding scandals.

Both Hatoyama and Ozawa have denied any intentional wrongdoing, but public suspicions have been a key factor behind the government’s falling support rates.

Nor is an exit from the Futenma dilemma in sight.

The premier said on Wednesday he would stick to his end-May deadline on resolving the dispute over where to relocate the U.S. Marines’ Futenma airbase on Okinawa, reluctant host to the majority of U.S. forces in Japan.

But opposition has flared in one potential relocation site outside of Okinawa, while Washington wants to stick to a 2006 deal to shift the base to the northern part of the island.

(Editing by Ron Popeski)

Nearly half of Japan’s voters support no party

(Reuters) – Nearly half of Japan’s voters support no political party, according to a poll released on Monday, a sign of mounting frustration with both ruling and opposition parties ahead of an election expected in July.

World | Japan

Hoping to attract some of these dissatisfied voters, former finance minister Kaoru Yosano and other opposition Liberal Democratic Party (LDP) rebels are aiming to start a new party this week. It is unclear how much support they can attract.

Prime Minister Yukio Hatoyama’s Democratic Party needs to win an outright majority in the mid-year upper house poll to avoid a policy stalemate, but voter concerns about his leadership skills, messy decision-making and funding scandals are dimming that prospect.

The survey by the Yomiuri newspaper showed voter support for the ruling Democrats fell to 24 percent and that for the main opposition LDP dropped to 16 percent.

Alarmed LDP executives decided on Monday to form a British-style “shadow cabinet” and to bring in an outspoken lawmaker critical of party’s senior members as an executive, Kyodo news agency said, in an effort to prevent further unraveling of the party.

“I would like to show that there are debaters among LDP’s next generation and for them to fully explain policies,” Sadakazu Tanigaki, the head of the LDP, told a news conference.

The tiny pro-reform opposition Your Party was gaining support and came third in the Yomiuri poll, but still lagged with support of just 4 percent.

When asked which party they plan to cast their ballots for in the upper house election, 44 percent said they had not decided.

With many disappointed by the premier’s leadership skills, support for Hatoyama’s government dropped to 33 percent, down 8 points from last month’s survey.

The survey showed 49 percent said Hatoyama should quit if he cannot resolve a row with Washington over a military base by a self-imposed deadline of end of May, exceeding 43 percent who said there was no such need.

That contrasted with recent polls showing fewer voters think Hatoyama should resign over a funding scandal.

Hatoyama said last week he has a plan to resolve the feud with security ally Washington over the relocation of a U.S. marine base on Okinawa island. But he said the time was not ripe to reveal it and dismissed questions about whether failure might force him to resign.

(Reporting by Yoko Nishikawa and Yoko Kubota; Editing by Ron Popeski)

Q+A – Japan PM mired in row over U.S. base move

Japanese Prime Minister Yukio Hatoyama said on Wednesday he has a plan to resolve a row with Washington over the relocation of a U.S. Marine base on Okinawa island, but he did not want to make it public.

He had previously set himself a self-imposed deadline of Wednesday to gather together proposals to untangle the crisis, but dismissed questions about whether failure might force him to resign.

Hatoyama needs to resolve the feud to help restore confidence in his six-month old government ahead of an upper house election expected in July, which his ruling Democratic Party must win to avoid a policy stalemate.

A string of financial scandals involving ruling party lawmakers has eroded support in opinion polls to between 30-40 percent, about half the peaks hit when the Democrats took power in September.

Following are some questions and answers about the issue:

WHY HAS THIS DISPUTE COME TO A HEAD NOW?

Before Hatoyama’s election victory, he raised hopes that a 2006 plan agreed by the previous government with Washington to shift the Futenma Marine base to another part of Okinawa could be changed and the facility moved off the island.

Angered by the noise, crime and pollution they associate with the bases, many residents want him to stick to that stance.

Hatoyama pledged to pull together alternative proposals by the end of March, though not necessarily make them public, and to reach a final decision by the end of May, ahead of a possible meeting with U.S. President Barack Obama.

Nearly half of respondents to a newspaper poll last week said Hatoyama should resign if he failed to reach a deal by the end of May and media have interpreted his comments to mean he shares that view.

WHAT DO FINANCIAL MARKETS THINK?

Japanese financial markets are not reacting to the base row on a daily basis, because expectations were low from the outset that Hatoyama could resolve the issue quickly.

But any sudden and serious worsening of bilateral ties could jolt confidence in Japanese stocks, the yen and Japanese government bonds

CAN HATOYAMA RESOLVE THE DISPUTE AND STAY ON?

Maybe, but chances are fading that a new deal can be reached by the May deadline. U.S. officials have repeatedly said they believe the current plan is the best, while the Democrats’ tiny coalition allies oppose it.

Media say several options are being floated, one involving building a new runway within the existing Camp Schwab base on Okinawa. This would reduce the bases’ overall footprint and avoid landfill in a bay frequented by the dugong, a rare marine mammal.

Another involves construction on landfill off another part of Okinawa, media say, but neither option is likely to find favour with local residents.

Hatoyama might agree to the current plan, or one with slight modifications, but that would also outrage many Okinawans and cause a rift with two tiny parties whose backing is needed to pass laws smoothly.

It might also spark puzzlement as to why Hatoyama raised the issue in the first place.

The dispute seems unlikely to spill over into trade and investment ties between the world’s two biggest economies. But damage to the alliance could create uncertainty in a region home to a rising China and an unpredictable North Korea, eventually affecting investment flows.

WHY CLOSE THE FUTENMA BASE AND REPLACE IT?

Residents of Okinawa, 1,600 km (1,000 miles) south of Tokyo and reluctant host to about half the 49,000 U.S. military personnel in Japan, have long resented what they see as an unfair burden in maintaining the security alliance.

Outrage flares periodically among residents, most strikingly after the 1995 rape of a schoolgirl by three U.S. servicemen.

As part of a 1996 pact to reduce the U.S. military presence, the United States and Japan agreed to close Futenma Air Station, home to about 4,000 Marines and located in crowded Ginowan City, within seven years if a replacement could be found on Okinawa.

An initial plan for an offshore facility in northern Okinawa was opposed by locals and environmentalists. The current plan is for relocation to Nago, where it would be partly built within another base and on reclaimed land.

IS THIS JUST ABOUT FUTENMA?

No. The issue is much broader. Washington and Tokyo agreed in 2006 on a “road map” to transform the decades-old alliance, the pillar of Japan’s post-World War Two security policies.

Part of a U.S. effort to make its military more flexible globally, the realignment fitted efforts by the then-ruling LDP to shed the constraints of Japan’s pacifist constitution and assume a higher security profile.

Central to the pact was a plan to reorganise U.S. troops in Japan, including a shift of up to 8,000 Marines by 2014 to the U.S. territory of Guam from Okinawa. The Marines’ move, however, depends on finding a replacement site for Futenma.

(Additional reporting by Linda Sieg and Masayuki Kitano)

U.S. ‘respects’ Japan’s request on airbase – Pentagon

The Pentagon said on Monday it respected Japan’s request to consider alternatives to the relocation of a U.S. air base on Okinawa island but stopped short of pledging to explore new options to soothe strained ties between the allies.

The comments by a Pentagon spokesman came as U.S. Defense Secretary Robert Gates met Japan’s foreign minister at the Pentagon, talks that touched on the future of Futenma Air Station, which is home to about 2,000 Marines.

“We respect Japan’s request to explore alternatives,” Pentagon spokesman Bryan Whitman said. “But with respect to any discussions or details, we’ll conduct those discussions through diplomatic channels.”

The dispute, which is eroding Japanese Prime Minister Yukio Hatoyama’s ratings before a mid-year election, centers on a 2006 accord that included shifting the Marines’ base to a less crowded spot on Okinawa.

During the campaign that swept his party to power last year, Hatoyama raised hopes Futenma could be moved entirely off the island, which plays reluctant host to most of the roughly 49,000 U.S. military personnel stationed in Japan.

But there was still no sign of a feasible alternative before Hatoyama’s self-imposed May deadline to resolve the matter. Washington wants to go ahead with the accord, as-is.

U.S. Secretary of State Hillary Clinton discussed the matter later on Monday with Japanese Foreign Minister Katsuya Okada in Ottawa, but U.S. officials gave no indication Washington was ready to change its mind.

“Basically there was no change here from previous conversations,” a U.S. official said after the meeting, adding that the Japanese did not provide details of their new ideas for Futenma during the conversation with Clinton.

WRAPPING UP THE REVIEW

Japanese opposition to keeping the base in Okinawa has centered on safety concerns and air pollution tied to training flights over residential areas but has also been stirred by anti-American feelings.

Mass protests erupted in 1995 when three U.S. servicemen abducted and raped a 12-year-old Okinawan girl.

The Pentagon offered few details of the Gates-Okada meeting. It stressed Gates underscored his view that “the Marines in Okinawa are critical to the alliance,” according to a Defense Department statement.

The United States expected Tokyo “to help ensure (the Marines’) presence remains operationally and politically sustainable,” the statement added, without elaborating.

Okada and Gates also agreed on the importance of quickly completing the review on Futenma, it said.

The Futenma relocation is part of a broader realignment that also involves shifting 8,000 Marines to Guam from Okinawa by 2014, a deadline that looks increasingly difficult because of foot-dragging on Futenma.

Japanese media have reported Tokyo’s alternative could involve the creation of an artificial island off Okinawa or the use of a different island for the base.

Admiral Robert Willard, head of U.S. Pacific Command, told lawmakers in Washington last week he was optimistic Hatoyama would stick to the current 2006 agreement on Futenma.

A recent poll published in the Sankei newspaper showed nearly half of those who responded said Hatoyama should quit if he fails to resolve the air base issue.

More than 73 percent of voters polled by the Sankei said they were unhappy with his management of the problem, while nearly 85 percent of respondents said they were unimpressed with Hatoyama’s leadership skills overall.

(Additional reporting by Susan Cornwell and Andrew Quinn in Ottawa; editing by Paul Simao and Todd Eastham)

FACTBOX – Japan PM’s troubles mount before mid-year election

Japanese Prime Minister Yukio Hatoyama, six months on the job, faces a slew of troubles as support for his party falls ahead of a mid-year election it must must win to avoid policy deadlocks.

Failure for Hatoyama’s Democratic Party to win an outright majority in the upper house vote, expected in July, would force the party to either keep the current coalition with two smaller parties with which it differs on policies, or seek new partners.

Graphic on Japan’s fiscal woes: http://link.reuters.com/qeg59h

Graphic on Japan voter support: http://r.reuters.com/myv63g

The following are some of the issues that have plagued Hatoyama since his Democrats took power for the first time last year, ending over a half-century of mostly conservative rule.

FISCAL/ECONOMIC POLICY

Hatoyama’s government has yet to convince voters and investors that it has a credible plan to end deflation and slash public debt which is already nearly twice the size of Japan’s GDP, the highest ratio among industrialised countries.

The government plans to map out a long-term growth strategy, as well as a plan for restoring the country’s fiscal health, by June.

But economists are sceptical about the chances of credible proposals, partly because of the government’s reluctance to raise taxes and election promises to boost spending for consumers.

Some investors and government officials worry that the long-term fiscal plan could bring Japan closer to a credit ratings downgrade if it does not include a workable plan to reduce debt.

Fitch, Moody’s and Standard and Poor’s have all warned Japan it faces a ratings downgrade, which could raise borrowing costs.

U.S. BASE DILEMMA

Analysts say Hatoyama may have to resign if he cannot resolve a feud with Washington over a U.S. Marine airbase on Japan’s southern Okinawa island by his self-imposed deadline of the end of May.

Hatoyama said during the election campaign last year he wanted to move the Futenma base off Okinawa, but Washington wants to go ahead with an existing plan to move the base to another part of the island.

U.S. Ambassador John Roos said after a meeting with Japan’s foreign minister on Friday that Japan had shared its thinking on the issue and that Washington would carefully consider it.

Hatoyama’s possible resignation is unlikely to mean a big change in policy, but would probably further dent his party’s chances of winning the upper house election.

Hatoyama’s likely successor, Finance Minister Naoto Kan, is not hugely popular with the public and voters would be disappointed with yet another leadership change, after seeing four in as many years.

MONEY SCANDALS

Media polls show a majority of the public still want Ichiro Ozawa, the Democratic Party’s secretary-general, to quit after his aides were charged earlier this year for misreporting political funds.

Hatoyama himself is also under criticism over his own political funding scandal, although fewer voters think he should resign.

Further falls in public support for the Democrats could put pressure on Ozawa to quit, although the impact of his resignation on the party’s election chances remains unclear because he is also credited for his campaigning skills.

Ozawa’s departure could also hurt the Democrats because he is seen by many as the real power behind the government and can make tough decisions on policies when others can’t.

ELECTION OUTLOOK

Voter perceptions that Hatoyama has been unable to make tough decisions on the economy and diplomacy have pushed down the government’s support rate to around 30 percent in some polls, less than half the figure when it took power.

Critics say Hatoyama has made the policy-making process more complicated by allowing his tiny but vocal coalition partners to meddle in it.

The Democrats need to win 60 or more of the 121 seats up for grabs in the 242-member upper house to win a majority and break free of its current two small coalition allies.

If they fall short, they may even have to look for new partners, putting further pressure on the government to implement costly policies, adding to already huge public debt and putting bonds under risk of a credit ratings downgrade.

(Editing by Sanjeev Miglani)

U.S. ‘optimistic’ on Japan base decision – military

A top U.S. military commander said on Wednesday he was optimistic Japan would soon agree to the planned relocation of a U.S airbase, a dispute that has strained U.S.-Japan ties.

Admiral Robert Willard, head of U.S. Pacific Command, told lawmakers he believed Prime Minister Yukio Hatoyama would stick to a 2006 accord that included shifting the Marines’ Futenma airbase to a less crowded spot on Japan’s Okinawa island.

“We are optimistic that the government of Japan will fully reaffirm the 2006 (government of Japan)-U.S. agreement by May 2010,” Willard said in testimony on Capitol Hill.

During the campaign that swept his party to power last year, Hatoyama raised hopes Futenma could be moved off the southern island, host to the bulk of America’s 47,000 military personnel.

But there is still no sign of a feasible alternative ahead of Hatoyama’s self-imposed May deadline to resolve the matter.

Willard also said he thought the Japanese government understood the time pressure and would stick to the timetable.

“There is a level of urgency in getting Futenma resolved,” Willard told reporters after a congressional hearing on military construction in the Pacific command. Moving the base elsewhere on Okinawa is a critical element of the Pentagon’s plan to relocate of 8,000 Marines to Guam, Willard said.

“We’re very anxious to hear what the government (of Japan) thinks.”

A poll published in the Sankei newspaper on Tuesday showed nearly half of those who responded said Hatoyama should quit if he fails to resolve the airbase row.

More than 73 percent of voters polled by the Sankei said they were unhappy with his management of the problem, while nearly 85 percent of respondents said they were unimpressed with Hatoyama’s leadership skills overall.

(Reporting by Susan Cornwell, Editing by Stacey Joyce)