Japan’s Kishida Removes Ministers in Bid to Stay in Power

(Bloomberg) — Japanese Prime Minister Fumio Kishida reshuffled his cabinet in an attempt to contain a funding scandal that threatens the future of his struggling government.

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The premier replaced four ministers Thursday who are among lawmakers accused of concealing income from fundraising events, including Chief Cabinet Secretary Hirokazu Matsuno and trade minister Yasutoshi Nishimura, who has been a key player in Japan’s efforts to revive its semiconductor industry.

Former Foreign Minister Yoshimasa Hayashi will replace Matsuno, while former agriculture minister Ken Saito will take over the trade portfolio, the two told reporters. Tetsushi Sakamoto was appointed as agriculture minister. Takeaki Matsumoto was named as internal affairs minister, Kyodo News reported and a representative from his office confirmed.

The move comes as reports from the Yomiuri newspaper and other media say prosecutors are preparing to raid the offices of lawmakers under suspicion, who are members of the largest faction within the long-ruling Liberal Democratic Party. The slush fund from the group once led by the late former Prime Minister Shinzo Abe may have amounted to about ¥1 billion ($7 million), the Yomiuri reported this week.

It’s unclear whether the reshuffle will help shore up support for Kishida’s government, the most unpopular in more than a decade according to a series of polls. Failure to steady the ship could force him to resign. One ruling party lawmaker has already suggested Kishida could do so in the spring, ahead of the end of his term as party leader in September.

Support for Kishida’s cabinet fell 4.2 percentage points to 17.1% in a survey published by Jiji Press on Thursday.

No general election need be held until 2025, and the LDP retains higher support rates than any of the opposition parties, meaning it is unlikely to lose power any time soon.

In the meantime, the turmoil threatens Kishida’s policy program, as he tries to push through measures to shield voters from the effects of inflation and seeks ways to fund his plans for the largest defense expansion since World War II. Kishida is reported to be considering canceling a trip to South America that had been planned for January.

Three senior ruling party officials also resigned Thursday, public broadcaster NHK said, in a move that could hamper the passage of next year’s budget. The ministers and officials, along with other faction members, are suspected of failing to declare income from fundraising events, in a breach of the political funds law.

The extent of alleged involvement by cabinet ministers and senior party officials has invited comparisons with the so-called Recruit affair of the late 1980s, when allegations of insider trading felled then-Prime Minister Noboru Takeshita.

–With assistance from Takashi Hirokawa.

(Updates with appointment of replacements.)

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