I was surprised to find out that the current Finance minister Noda was selected today to succeed Kan as Prime Minister of Japan. Actually, I was expecting it to go to Kaeda, the head of Japan’s Ministry of Economy, Trade and Industry. I even predicted this in an e-chat with a work colleague back in the US this morning. Although being recently in the news for breaking down in tears after an especially tough question and answer session in the Diet over the government’s handling of the disaster in March, Mr. Kaeda had the backing of the two most influential factions of the Democratic Party of Japan, the Hatoyama Faction, and the Ozawa Faction. Ozawa has long been a Godfather figure in Japanese politics, but his popularity has been waning for the past year due to scandals and a long-standing rivalry with the now former PM Kan. Kaeda comes from the Hatoyama Faction (Hatoyama also being a former PM and from a prominent family in Japanese politics). So given all the confusion over national policy these days, with Ozawa backing Kaeda over the weekend, it looked as if the die had been cast and all that was needed was for the party to meet today and formally seal the deal with a vote. All that remained for Kaeda to take the prize was to get a few more seats over those seats these two factions already controlled.
But alas, it didn’t work put that way. In the first vote, Kaeda took a plurality but not an outright majority, and so a second vote was required. In the second vote, enough of the people backing the other three candidates decided to cast an “Anybody but Ozawa” vote to push Noda above the threshold and into the PM chair. The vote turned out to be more of a referendum against Ozawa and the typical old-boy kingmaker sort of tactics that have marked Japanese politics for years, not exactly a resounding vote in support of the new Prime Minister.
And Noda the new PM? Who is this guy exactly? He’s about as plain as they get. There was a good writeup about him in the WSJ the other day (here and his famous snowball analogy). There was also a lot of press about his speech before the second vote, where he compares himself to a loach (a bottom-feeding, plain and unattractive fish) and contrasts his style against that of the goldfish (all flash and little substance). He also appealed a lot for “No sides”, in reference to the party infighting that has plagued the DPJ for so long. As far as policy, I only know that he wants to raise taxes, since Japan is so badly in need of funds for reconstruction and with the fiscal deficit now around 200% to GDP and a recently downgrade, the country can’t so easily turn to the bond markets. In fact, this afternoon the bond market rallied upon hearing the news that he won. As far as energy policy goes, I think it’s still too early to tell. For now he appears to be fairly pragmatic, focused more on getting done what can be done in the current political climate instead of trying to make too many waves at the outset with grandiose promises. That might be okay for starters, but if there’s any broader vision in there, it’s nowhere to be seen as of now. Guess we’ll have to see if he has any surprises!