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Kan Survives Japan No-Confidence Vote After Post-Crisis Resignation Signal

Japan’s Prime Minister Naoto Kan survived a no-confidence vote after appealing to ruling party dissidents by offering to resign once the country’s worst crisis since World War II is under control.

The Diet’s lower house voted 293-152 against the motion, as opposition lawmakers failed to attract enough support from Kan’s Democratic Party of Japan. Former DPJ premier Yukio Hatoyama called for party unity in rejecting the bill after Kan said he would step down once the disaster is contained.

Deepening discontent over the government’s handling of the March earthquake and tsunami that precipitated the worst nuclear disaster in 25 years prompted the measure. Growing disunity in the ruling party hampered Kan’s efforts to deal with a stagnant economy and heightened concerns over the government’s ability to reign in the nation’s debt burden.

“Kan won a measure of confidence but only on the condition that he won’t last long,” said Steven R. Reed, a professor of political science at Chuo University in Tokyo. The opposition “got a resignation promise from Kan, making him a lame duck.”

Japanese government bond futures rose as concerns over political instability eased. Ten-year yields fell four basis points to 1.14 percent. The yen was little changed at 80.89 per dollar at 4:48 p.m. in Tokyo, while the benchmark Nikkei 225 (NKY) Stock Average closed down 1.7 percent before the vote.

‘Younger Generation’

Speaking in a nationally televised meeting of DPJ lawmakers ahead of the vote, Kan said he would “like to pass on my responsibility to a younger generation once we reach a certain stage in tackling the disaster and I’ve fulfilled my role.”

While the comment likely reduced the number of DPJ dissidents who had planned on voting against him, conflicting interpretations arose over how soon Kan might step down.

Hatoyama, who along with indicted former DPJ chief party chief Ichiro Ozawa had sought Kan’s ouster, said the prime minister agreed in a meeting to step down as early as this month after a second post-quake stimulus bill is drafted. DPJ Secretary-General Katsuya Okada said there were no conditions or timing attached to Kan’s comment.

Speaking at a late-night press conference, Kan denied reaching an agreement with Hatoyama on when he might resign. He said “it’s my responsibility” to stay on until the situation at a crippled nuclear power plant is stabilized through a cold shutdown of its reactors. Tokyo Electric Power Co. in April said it aims to stabilize the facility in six to nine months.

‘Unavoidably Damaged’

The prime minister “will be unavoidably damaged” by today’s vote, said Yasunori Sone, a political science professor at Keio University in Tokyo. “Even if Kan is replaced, it will be difficult for anybody to manage a divided party and a government that doesn’t control parliament.”

Kan’s announcement is likely to spur speculation over who in the party will replace him. Possible successors include Okada, Chief Cabinet Secretary Yukio Edano and former foreign minister Seiji Maehara. All were among a group voters cited as preferable candidates in a Nikkei newspaper survey published May 30.

Kan’s approval rating was 26 percent in an Asahi poll published May 16, up five percentage points from a month ago, while his unfavorable rating was 51 percent. Almost two-thirds of those asked disapproved of his response to the crisis at the nuclear plant, where reactor meltdowns sent radiation into the air and sea and prompted the evacuation of 50,000 households.

Opposition Demand

The main opposition Liberal Democratic Party, the New Komeito party and the Sunrise Party of Japan yesterday submitted the motion to the Diet’s lower house. LDP leader Sadakazu Tanigaki yesterday repeated his call for Kan to step down in a parliamentary debate, saying the prime minister’s resignation “would pave the way for cross-party unity.”

Several opposition groups coalesced to form the DPJ in 1998 and the party came to power in 2009, ending the monopoly of the LDP, which had ruled for all but 10 months since 1955. Kan took office after Hatoyama resigned in June last year when he reneged on an election pledge to move a U.S. military base from the island of Okinawa, angering local residents and prompting a coalition partner to bolt the government.

Kan has been unable to reach common ground with the LDP over efforts to rebuild in the wake of the disaster, which left almost 24,000 people dead or missing. He has also failed to win opposition support for legislation authorizing 44.3 trillion yen ($545 billion) in government bond sales to finance Japan’s debt.

Moody’s Investors Service on May 31 put the country’s debt rating on review for a downgrade, citing concerns over the government’s ability to fashion and “achieve a credible deficit reduction target” and the “intensifying level of political challenges” for Kan.

To contact the reporters on this story: Sachiko Sakamaki in Tokyo at ssakamaki1@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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