Japan to pick latest PM as revolving door turns
TOKYO (Reuters) - Japan's ruling party picks a new prime minister Monday and little suggests that the nation's sixth leader in five years will have the necessary vision, power or time to tackle a long list of economic ills while coping with a nuclear crisis.
Trade Minister Banri Kaieda, 62, appears to have the lead ahead of the vote by Democratic Party of Japan (DPJ) lawmakers but a run-off is likely as none of the five contenders to succeed outgoing Prime Minister Naoto Kan seems set to win a majority in a first-round vote.
Whoever wins will have to cope 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 devastating March 11 tsunami at a time when ballooning public debt has already triggered a credit downgrade.
Like Kan, the new leader faces a divided parliament and internal party rifts, raising concerns that he will join a gallery of short-lived prime ministers. No Japanese prime minister has lasted much more than a year since 2006.
"Although the Kan administration, which was enveloped in a sense of deadlock, has finally decided to step down and a new government will begin, frankly, hopes are not growing," said a weekend editorial in the Tokyo Shimbun, a metropolitan daily.
The Democrats swept to power two years ago promising to change how Japan is ruled.
But the party quickly lost momentum, dogged by internal divisions and a hung parliament as its novice team confronted the global financial crisis and the March disaster that left 20,000 dead or missing and pushed the economy back into recession.
A win by Kaieda could unsettle investors worried about Japan's bulging debt, already twice the size of its $5 trillion (3.1 trillion pound) economy, given his reluctance to endorse tax hikes to pay for reconstruction from the March tsunami.
Moody's Investors Service cut Japan's sovereign credit rating last week citing a buildup of public debt and a lack of leadership and a long-term strategy to cope with its fiscal challenges.
Despite differences over policies such as whether to raise taxes to pay for rebuilding and how to secure opposition cooperation, none of the five candidates has presented a detailed vision of how to end Japan's decades of stagnation and revitalise the world's third-biggest economy.
The party's lack of a common voice on reconstruction funding, taxes in general and an economic growth strategy means none of the would-be prime ministers is likely to take any bold action given the risk of alienating backbenchers and voters.
Instead, the leadership contest has become a battle between allies and critics of Ichiro Ozawa, a 69-year-old political mastermind who heads the party's biggest group even as he faces trial on charges of misreporting political donations.
Ozawa's backing of Kaieda put the minister, who was responsible for oversight of the nuclear industry, ahead of a field that includes Finance Minister Yoshihiko Noda, 54, a fiscal conservative favoured by investors, and foreign minister Seiji Maehara, 49, the most popular with ordinary voters.
Noda and Maehara, who share a similar party power base, are jostling for second place with farm minister Michihiko Kano, 69, who lacks public appeal or clear policies.
The fifth candidate, former transport minister Sumio Mabuchi, 51, is well behind.
One of the new leader's first challenges will be seeking opposition help in parliament, where the opposition controls the upper house and can block legislation. Maehara and Noda have floated the idea of a "grand coalition" with opposition rivals -- although the two biggest opposition groups have been cool.
Kaieda says he's not keen on that strategy.
(Editing by Edmund Klamann and Michael Watson)
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.