Window of opportunity

20 May 2010 By Tim Kelly

The unpopular prime minister has alienated investors and failed to grasp the nettle on Japan’s outsized debt. If he stays in place until July’s elections, he risks losing control of the upper house. That would deprive Japan of a chance to wean itself off its toohigh borrowings.

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Only 21 percent of Japanese voters support Prime Minister Yukio Hatoyama and his Cabinet, according to a survey by daily newspaper Asahi Shimbun on May 15. That compares with 71 percent in a September poll, a month after the Democratic Party of Japan took power.

Voters are displeased with Hatoyama's failure to relocate a U.S. military base in the southern island of Okinawa, home to the biggest contingent of U.S. Marines outside America, as he formerly pledged to do, Asahi said.

Japan will elect lawmakers for its upper house, currently controlled by the DPJ and its coalition partners, on July 11. Every three years an election is held, in which half the seats are chosen.

Japan's public net debt excluding currency and deposits, is estimated at 184 percent of GDP, according to Fitch Ratings. Hatoyama's administration this year will borrow 44 trillion yen ($470 billion).

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