Japan PM vows to fix economy in 2010

TOKYO: Japanese Prime Minister Yukio Hatoyama, whose popularity has tumbled in recent weeks, vowed Friday to dedicate 2010 to fighting deflation and rebuilding the world's second biggest economy.

Acknowledging the growing discontent, Hatoyama asked the country to support his administration as it begins to implement key campaign pledges, including monthly child allowances, that helped sweep his Democrat party into power last summer.

"My government's honeymoon period is over now, and we can no longer ask people to judge us with a warmly forgiving eye," he said in a New Year's Day statement. "My hope is that we can consider the issues and engage in struggle together with you, in the process receiving your pointed criticisms."

Japanese voters gave Hatoyama a strong mandate for change in August, but they appear to be souring on his ability to deliver.

A national poll this week by the Nikkei financial newspaper showed that popular support for the prime minister fell to 50 percent, while disapproval rose 18 points from November to 42 percent. Respondents cited the Cabinet's lack of leadership, as well as his response to a recent fundraising scandal.

Japan's economy emerged from recession earlier this year, but its future is blurred by falling wages and prices. The labor market remains weak, and a strong yen threatens to shrink corporate profits.

Hatoyama last week unveiled a record 92.29 trillion yen ($1 trillion) budget for the next fiscal year, hoping to bolster household spending with larger social welfare programs. But Cabinet infighting has marred budget negotiations, and shrinking revenue has forced Hatoyama to backtrack on some promises such as abolishing a gasoline tax.

His government's relationship with Washington is also under scrutiny amid a dispute over the relocation of an American military base on the southern island of Okinawa. The U.S. wants Tokyo to stick to a 2006 agreement to move the base to a different part of the island, but Tokyo's new leaders have suggested it be relocated elsewhere.

Hatoyama has delayed a decision for several months, triggering anger within Japan and concern in Washington.

"I ... intend to carry out proper discussion on the issue of the relocation of the Futenma air station, gleaning every bit of wisdom possible in order to reinforce the Japan-U.S. alliance, a matter of Japan's security, while we also reduce the burden on the people of Okinawa prefecture as much as possible," he said in his New Year's address.

The prime minister also reiterated his remorse over a fundraising scandal that tarnished his image as a clean, transparent politician. Last month, two former aides were charged with falsifying campaign contribution reports involving some $4.4 million.

Hatoyama said he did not know about the contributions until the prosecutors' investigation. Three-quarters of respondents in the Nikkei poll described the prime minister's explanation as inadequate.

"Last year the issue of my political funds became a cause for considerable concern among the people of Japan," he said. "Allow me once again to apologize sincerely for this."