Shizuka Kamei resigned as Japan’s Financial Services Minister after Prime Minister Naoto Kan declined to extend the parliamentary session to pass changes to banking and postal laws.
Kamei’s People’s New Party will remain in the coalition government with Kan’s Democratic Party of Japan, he said at a press conference broadcast on NHK television. Kamei’s replacement will be named later today, Chief Cabinet Secretary Yoshito Sengoku told reporters in Tokyo.
The delay gives banks opposed to the changes a second chance to soften laws allowing state-owned Japan Post Bank Co., the world’s biggest deposit holder, to double its share of Japanese savings. It also increases instability in Kan’s new government ahead of upper house elections next month.
“Every delay in the execution is pleasing to the banks,” said David Threadgold, a Tokyo-based analyst for Keefe Bruyette & Woods Inc. “The banks have legitimate complaints that a government-owned and backed entity is moving into more direct competition in more areas with the private sector.”
Masayuki Oku, chairman of the Japanese Bankers Association, has said allowing the postal bank to double the amount of deposits it take per person to 20 million yen ($220,000) may spark an outflow of funds from private banks, especially small regional lenders. Kamei’s legislation also ensures the government retains a one-third stake in parent company Japan Post Holdings Co., which Oku said gives it an unfair advantage.
Bank Shares Rise
Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, rose 3.6 percent to 431 yen as of 12:43 p.m. trading break in Tokyo, heading for its biggest gain since Jan. 15. Mizuho Financial Group Inc., Japan’s second-largest bank by assets, increased 1.9 percent and the Topix Bank Index tracking 83 lenders gained 2.2 percent.
The Democratic Party of Japan, which swept to power after winning almost two-thirds of seats in the lower house of parliament in August last year, needs the support of Kamei’s party in the upper house to push through legislation. Elections to be held next month will determine if the Democratic Party can seize a majority in the upper house without Kamei’s support.
Kan became prime minister this week after the resignation of Yukio Hatoyama amid plunging popularity, campaign-finance scandals and broken campaign promises.
‘Get a Clue’
“These guys really have to get a clue -- internal Japan fighting is not needed,” said Winston Barnes, head of sales and trading for Asian markets at WJB Capital Group Inc. in San Francisco. “They need to unite and continue be a leader in Asia. Surrounding economies are developing quickly.”
More than 60 percent of Japan’s voters support Kan’s new administration, three times the number who endorsed predecessor Yukio Hatoyama before his resignation, according to a poll conducted by News Kyodo between June 8 and June 9.
Kan’s government may change its stance on Japan Post after the elections, said Hironari Nozaki, a Tokyo-based analyst at Citigroup Inc.
The legislation, which passed the lower house last month, will probably have to be resubmitted as a new bill in the next session, according to Citigroup’s Nozaki, allowing lawmakers to reconsider the contents.
Kan said June 4 when elected to lead the Democratic Party that he’d try to pass the postal bill in the current session of parliament. The Nikkei newspaper reported today that Kan would allow the current parliamentary session to end as scheduled on June 16 and aim to pass the bill following elections for the upper house.
Oku and the leaders of seven other banking organizations held a press conference on May 20 to ask the government to reconsider legislation on Japan Post.
Norihiko Otsubo, a spokesman for the Japanese Bankers Association, said today the lobby will continue make its opinions on the bill known, and hope that politicians will consider carefully if the postal bill is in the national interest.