Prime Minister Naoto Kan of Japan resigned from leadership of his party on Friday and confirmed that he would step down from his government post, leaving the path clear for a successor to be chosen on Monday.
At the same time, Toshiro Muto, former Bank of Japan (BOJ) deputy governor and a former top bureaucrat at the nation’s finance ministry, called for a continuation of efforts to reform fiscal policies regardless of who Kan’s successor might be.
Bloomberg reported that Kan took the action after Parliament passed two key pieces of legislation he had pushed for: one to subsidize renewable energy and the other to allow the government to issue more debt. He had suffered a tremendous loss of support over his handling of the disaster at Fukushima, and only survived a no-confidence vote earlier in the year by a promise to step down later.
Muto, according to a Reuters report, said that BOJ should consider additional quantitative easing (QE) because its other currency interventions have had a limited effect; the strength of the yen is adding to Japan’s economic woes. He also pushed for tax hikes as part of fiscal reform, saying that waiting too long could cause a market backlash.