Oct. 5 (Bloomberg) -- Shoichi Nakagawa, who resigned as Japanese finance minister in February amid accusations of drunken behavior during an international conference in Rome, was found dead in his Tokyo home yesterday. He was 56.

Nakagawa lost his parliamentary seat in Aug. 30 elections that saw the Liberal Democratic Party swept out of power after half a century of almost unbroken rule. He was not offered one of the party’s proportional representation seats.

A second-generation LDP lawmaker, Nakagawa was regarded as one of the party’s “aces,” according to Makoto Haga, chief strategist at Monex Group Inc. in Tokyo, who called his death a “painful blow” to a party that needs to rebuild.

“Compared with the widespread mistrust of the LDP, Nakagawa’s troubles didn’t have much impact on the election,” Haga said yesterday. “The result would likely have been the same regardless.”

Police confirmed Nakagawa’s death and are investigating, said a spokeswoman at the Tokyo Metropolitan Police Department, who declined to be identified. Nakagawa’s wife found him in the second-floor bedroom of their home and called emergency services at 8:18 a.m. No will was found and the cause of death is yet to be determined, the spokeswoman said.

The Yomiuri newspaper said police determined that the possibility of suicide was low. A police spokesman, who declined to be identified, today said he couldn’t comment on the report. Nakagawa’s father killed himself in a hotel room in 1983.

Tokyo Funeral

A funeral will be held in Tokyo on Oct. 9, said Masato Yoshida, head of Nagakawa’s office in his constituency of Obihiro, Hokkaido.

Hirohisa Fujii, appointed finance minister in the new Cabinet of Prime Minister Yukio Hatoyama last month, called Nakagawa’s death “regrettable” in Istanbul yesterday, where he was attending a meeting of Group of Seven finance chiefs.

“He did a good job as finance minister,” Fujii told reporters. He said he knew Nakagawa “ very well” as the two were colleagues until Fujii left the LDP in 1993 to join a group that later merged into the now-ruling Democratic Party of Japan.

Bank of Japan Governor Masaaki Shirakawa, also at the G-7 meeting, expressed shock and offered “heartfelt condolences” over Nakagawa’s death.

After earning a degree at the University of Tokyo in 1978, Nakagawa worked at the Industrial Bank of Japan, one of the forerunners of Mizuho Financial Group Inc. He was elected to the lower house in 1983, winning the Hokkaido constituency his father earlier held, was appointed to ministerial posts including agriculture and trade, and served as the LDP’s chief policy maker.

Aso’s Finance Chief

Named finance minister by then-Prime Minister Taro Aso in September 2008, Nakagawa sought to revive a Japanese economy that had shrunk 3 percent in the second quarter as factory production in August fell at the fastest pace in five years and unemployment reached a two-year high.

Aso yesterday praised Nakagawa’s expertise in international finance, according to a Kyodo News report. “I’m too shocked to speak,” Aso was quoted as saying.

As finance minister, Nakagawa urged coordinated policy actions by the U.S. and Europe to rein in the growing global financial crisis. On the domestic front, he promoted a range of economic-stimulus polices including job training for young workers, “some kind of support to the markets” and extension of an earlier guarantee on life insurance policies.

China Hawk

Earlier, as party policy chief in the Cabinet of then-Prime Minister Shinzo Abe, Nakagawa supported the Bank Of Japan’s policy of holding interest rates down to stimulate the domestic economy. He also took a hawkish view on China’s growing economic and military power, saying in March 2007 that Japan’s largest neighbor was increasing defense spending at an “abnormal” pace.

“He could’ve aimed for prime minister had things played out differently,” Monex’s Haga said.

Nakagawa slurred his words and appeared to be drunk during a press briefing after finance ministers and central bankers met in Rome Feb. 14 to deal with the global economic slowdown. He attributed his behavior to an overdose of cold medication combined with jet lag, before resigning.

In a statement on his Web site dated March 30, Nagakawa said he had been hospitalized for two weeks following his resignation and that after a number of tests doctors had found “nothing in particular wrong.”

In addition to his wife, Nakagawa is survived by one daughter and one son.

To contact the reporters on this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net;

Last Updated: October 5, 2009 00:20 EDT