Fukuda May Revamp Japan's Cabinet as G-8 Fails to Boost Support

By Toko Sekiguchi and Takashi Hirokawa
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Aug. 1 (Bloomberg) -- Yasuo Fukuda is preparing to dip into a Japanese prime minister's most trusted playbook to bolster his government's popularity: the Cabinet reshuffle.

Fukuda, 72, will meet a key coalition partner later today to discuss changes 10 months into his term. A shuffle will ``depend on the outcome of the meeting,'' Fukuda told reporters in Tokyo late yesterday.

With an election no more than a year away, he has faced growing calls within the ruling Liberal Democratic Party to replace ministers to shore up public support. No Japanese leader since World War II has gone more than two years without tinkering with his cabinet, a maneuver used to reward factions within a party that has held power for all but one year since 1955.

``Shuffling for shuffling's sake has created a system where most ministers aren't in their posts long enough to gain expertise in a field,'' said Taku Sugawara, a professor of political science at the University of Tokyo. Still, the move ``may stabilize Fukuda's support base within the party.''

Fukuda's public approval rating has fallen by half since he took office in September, punctured by a feisty opposition that controls the less-powerful upper house of parliament, and criticism within his own party that he lacks a vision for Japan. He didn't get the bump in support he was counting on by hosting Group of Eight leaders for their annual summit last month in Hokkaido, northern Japan.

Fukuda inherited 15 of 17 ministers from predecessor Shinzo Abe. Calls from LDP officials to replace some of them intensified as Fukuda's popularity slumped because of struggles with the Democratic Party of Japan, which used its majority in the upper house to frustrate the government.

`Very Unkind'

The DPJ blocked five of Fukuda's nominees for central bank positions, including two former finance ministry officials for the role of governor, saying they would have undermined the Bank of Japan's independence. The opposition also blocked a bill extending a gasoline tax, saying the world's second-largest economy needed the stimulus of tax cuts.

Former LDP Secretary General Koichi Kato said in a July 2 interview that opinion polls ``would be very unkind'' to Fukuda unless he reshuffled his cabinet and clearly defined policies within a month of the G-8 meeting, which ended July 9.

Most senior party officials have served in several governments. Fukuda himself was chief cabinet secretary under Junichiro Koizumi, one of the few leaders to take on party factions and include outsiders in his government. Chief Cabinet Secretary Nobutaka Machimura has served as education minister, and is a two-time foreign minister.

DPJ leader Ichiro Ozawa orchestrated a censure motion against Fukuda last month, the first time for a prime minister in postwar history. The motion, which wasn't binding, criticized his handling of health care for the elderly and a failure to negotiate with upper house lawmakers. Ozawa has also called for general elections before they are required in September 2009.

LDP Criticism

LDP members have also criticized the prime minister. Yuriko Koike called on Fukuda to ``lead more assertively,'' and former foreign minister Taro Aso said in a June 2 speech that the country had lost its ``competitive edge.''

Fukuda's approval rating rose after he hosted the G-8 summit in northern Hokkaido and a cabinet shift may add momentum to the recovery, bolstering his support within the party, lawmaker Seishiro Eto said in a July 24 interview.

Fukuda's popularity gained 1 percentage point from last month to 24 percent in an Asahi newspaper survey, eking out similar gains in polls in the Yomiuri and Mainichi newspapers. All three surveys were published July 15.

Fukuda's approval fell to a low of 21 percent in May following standoffs with the opposition Democratic Party of Japan, down from 59 percent shortly after his term began in September, according to a Nikkei newspaper survey. None of the surveys provided a margin of error.

To contact the reporter on this story: Toko Sekiguchi in Tokyo at Tsekiguchi3@bloomberg.net; Takashi Hirokawa in Tokyo at hirokawa@bloomberg.net;