21/10/2014 08:10 AST
TOKYO -- The resignation on Monday of two ministers in the Japanese cabinet over money scandals is a major political setback for Prime Minister Shinzo Abe.
Not only have these scandals broken at a crucial time for Abe's efforts to rejuvenate the economy, they embroil two ministers who were supposed to symbolize his policy initiative to promote the role of women in society, a key component of his growth strategy.
The departures of Economy, Trade and Industry Minister Yuko Obuchi and Justice Minister Midori Matsushima have hurt Abe's plan to highlight his policies for empowering women, which has been a centerpiece of the reorganized cabinet's policy agenda during the current Diet session.
The political damage is all the more serious because the Japanese economy is showing signs of weakening. The consumption tax hike in April has slowed consumer spending, and the effect of the weaker yen on prices of goods means that households are under pressure to cut expenditures because wage growth cannot keep pace.
Last week, the Nikkei Stock Average hit a five-month low. Even though the key index bounced back Monday, the market's overall outlook remains murky.
Abe will decide near the end of this year on whether to go ahead with the planned second rise in the consumption tax. In April, it was raised to 8% from 5% -- the plan is to raise it to 10% in October 2015, if economic conditions are favorable, such as preliminary gross domestic product data for the July-September quarter, which is due out on Nov. 17.
A growing number of lawmakers of Abe's Liberal Democratic Party are voicing skepticism about another tax hike. They fear the ruling party could take a drubbing in unified local elections next spring if Abe decides to go ahead with the hike.
If the prime minister opts to postpone the tax increase, however, it will become even harder for the government to deliver on its international promise to achieve a primary budget surplus by fiscal 2020. And that could disappoint investors.
The resignation of the two ministers could become the event seen as when everything changed for Abe.
All too familiar?
At a press conference following his cabinet reshuffle in early September, Abe expressed his expectations for the five women newly appointed to the cabinet. "I hope they will breathe fresh life [into the government] by tackling challenges from the unique viewpoints of women," he said.
Obuchi, in particular, was the focus of expectations for the reorganized cabinet. At 40, she was the youngest member of the cabinet, and was to hold an important post. She was even considered one of the best prospects for becoming Japan's first female prime minister.
The Nov. 16 gubernatorial election in Okinawa Prefecture, which the Abe government sees as a key political battle, will be officially announced on Oct. 30, marking the start of the official campaign period.
Obuchi's father was Keizo Obuchi, the prime minister from 1998 until his death in 2000. He is remembered in Okinawa as the person who decided to hold the 2000 summit of the Group of Eight leading countries in the prefecture.
Many in the LDP had hoped that Yuko Obuchi would serve as the public face of the party during the upcoming unified local elections. But money scandals are some of the most powerful blows to a politician's standing with voters.
One big scandal could dramatically change the political tide.
The resignation of the two ministers must have reminded Abe of the nightmare he went through the first time he was prime minister from September 2006 to September 2007.
In December 2006, Genichiro Sata, the minister in charge of administrative reform, resigned over a political funds scandal. In May 2007, the agriculture minister, Toshikatsu M
Asian Nikkei
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