Noda Urges Bond Bill Stalemate End With Majority at Risk

Japan's Prime Minister Yoshihiko Noda
Japan's Prime Minister Yoshihiko Noda. Photographer: Haruyoshi Yamaguchi/Bloomberg

Japanese Prime Minister Yoshihiko Noda urged the opposition to end a stalemate over funding this year’s budget as his parliamentary majority narrowed after two lawmakers left the ruling party.

“Endless energy continues to be expended on fighting for power by exploiting an issue everyone faces,” Noda said today in the text of a speech marking the opening of a parliamentary session. He urged the opposition to cooperate to pass the bill “as soon as possible.”

Noda also vowed to tackle deflation and the strong yen, both of which are weighing on a weakening economy. The speech came hours after Tomohiko Mizuno and Atsushi Kumada resigned from the Democratic Party of Japan and a poll showed Noda’s approval rating fell 13 percentage points to 20 percent.

Parliament re-opens with Noda deadlocked with the largest opposition parties over legislation needed to fund the rest of the year’s budget ahead of an election that must be called by August. The DPJ, which along with a coalition partner once controlled more than two-thirds of the 480 seats in the lower house, now has a six-seat majority.

“Noda’s reliant on just six people,” said Tokyo-based independent political commentator Harumi Arima. “From the public’s point of view, it looks as though he’s unable to stem the flow.”

Today’s resignations came after the justice minister last week quit, having admitted to links to the Yakuza and to accepting donations from a foreign-run company. Noda has failed to persuade opposition leaders to back legislation authorizing the issuance of deficit-financing bonds without specifying when he will fulfill an August pledge to call elections “soon.”

Talks Fail

Talks on the legislation with main opposition Liberal Democratic Party leader Shinzo Abe and New Komeito leader Natsuo Yamaguchi, fell apart this month. The two lawmakers said they could not cooperate on the passage of bills without a firmer commitment on the election.

Finance Minister Koriki Jojima today reiterated that the government will run out of money at the end of November unless parliament passes the legislation. The standoff leaves Noda with few options to boost an economy hit by plummeting exports amid a territorial dispute with China, Japan’s biggest trading partner.

Some LDP officials have shown signs of flexibility on the bond issuance bill. “In any case it will have to be passed,” policy chief Akira Amari said in an interview broadcast by BS Asahi television at the weekend.

Noda today said he would work even more closely with the Bank of Japan to revive growth. Japan suffered a worse-than-expected trade deficit in July as Europe’s debt crisis and a slowdown in China dragged down exports and nuclear shutdowns boosted energy imports.

The favorability rating for Abe’s LDP rose 5 points to 32 percent, according to the Nikkei newspaper poll published today. The paper surveyed 931 people and provided no margin of error.

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