Kan’s change reflects his deepening anxiety over the budget deficit after participating in meetings of Group of 20 and G-7 that were dominated by Europe’s debt crisis, a Finance Ministry official said on condition of anonymity. Kan, 63, surprised ministry officials and Prime Minister Yukio Hatoyama last month by extending a pledge to cap bond sales through next year.
The impact of Kan’s shift on policymaking may be magnified should he succeed Hatoyama, who announced his resignation yesterday after deepening tensions over the U.S. military’s presence in Okinawa. Kan would seek to distinguish himself from the previous four leaders since 2006 by pushing for more fiscal discipline and a higher sales tax, according to Barclays Capital.
“People used to think Kan was very much inclined to economic stimulus measures when he became the finance minister,” said Hiroyuka Maruyama, Global Markets CEO at Oppenheimer Lloyd in Tokyo., who predicts Kan will be selected as prime minister. “He’s been changing his tone and stance toward fiscal discipline after sovereign-debt risks climbed,” the Openheimer Lloyd CEO said.
Hatoyama, 63, is quitting after less than nine months in office as campaign finance scandals and indecision over where to move a U.S. military base sent the Cabinet’s approval rating down to around 20 percent in public opinion polls.
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