ING Investment Management: Market comment by Hisanori Gondo on resignation of Japanese Prime Minister Fukuda

Resignation of current Prime Minister Fukuda was a surprise in terms of timing. He announced his resignation right after he drew the economic stimulus plan, and not long while after he appointed new cabinet members. However, according to his comment, the timing was carefully measured to avoid any further delay of implementation for several important political initiatives, e.g. renewal of fuel aid law for military support to Iraq, setting up a new ministry for consumer service, fixing a public pension plan. In fact, with current unpopularity of Fukuda and difficult political balance including recent confliction with Komeito, a coalition political party to LDP (Liberal Democratic Party), it is rather obvious that the Fukuda government is heading to gridlock at the Diet.

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