The Prime Minister Vanishes

Then there's the problem of the opposition, which swept to power in the Diet's upper house last July. Jun Iio, a scholar at Tokyo's National Graduate Institute for Policy Studies, says that Fukuda is, like many LDP veterans, accustomed to decades of one-party rule, and has little notion of how to compromise when necessary. For its part, the DPJ hasn't made things any easier and bears a share of the blame for gridlock. Like Fukuda himself, DPJ leader Ichiro Ozawa has vacillated between bluster and calls for compromise, angering factions within his own party and contributing to the general sense of chaos.

Throughout his tenure Fukuda has displayed an unerring instinct for turning other people's mishaps into his own. He lets cabinet members publicly snipe at each other or propose policies that run counter to his government's stated aims, which include increasing foreign investment—a position undercut during Fukuda's visit to Davos this year, when members of his own government declared they would limit foreign stakes in airport operators. At other times, Fukuda has simply seemed asleep at the wheel. In February, for example, a Japanese Navy missile-cruiser ran over a fishing vessel in seas east of Tokyo, killing two fishermen. Rather than seize the moment to act decisively, the prime minister seemed barely to know what had happened: questioned by a reporter about the incident the morning the story broke, Fukuda could only mutter, "Oh, yes, right." Japanese TV viewers were left to wonder whether he was uninformed—or just didn't care.

Such displays of incompetence couldn't come at a worse time. The global financial crisis is hitting Japanese financial markets especially hard. Under Koizumi, foreign investors, thrilled by his forceful talk of reform, lifted Japanese stock prices to record highs. But recently those foreigners have begun stampeding for the exits—even though Japanese financial institutions have so far shown only minimal exposure to the subprime crisis in the United States. Since September, when Fukuda took office, the main section of the Tokyo Stock Exchange has lost 124 trillion yen ($1.24 trillion), or 25 percent of its value; during the same period the Dow has dropped by only 11 percent. This capital flight, analysts agree, owes mainly to Fukuda's inability to deliver on still-needed reforms.

So what's next? Fukuda's increasingly desperate air, and the growing backbiting within the LDP, has some observers suspecting he won't hold on much longer. But others warn he could take his rudderless party down with him when he falls—perhaps triggering a long-predicted realignment in Japanese politics as the LDP fragments. Still others are harboring hopes that a new savior could emerge, such as ex-foreign minister Taro Aso, said to be busily maneuvering behind the scenes. There are even tantalizing rumors of a Koizumi comeback. Only one thing's certain: matters are likely to get worse before they get better, and Fukuda's unlikely to be around when they do.

© 2008