OMEN
03-03-2009, 04:06 PM
A close aide of Japanese opposition leader Ichiro Ozawa has been arrested in a fundraising scandal that analysts say could force Ozawa to quit, ahead of an election his party had looked likely to win.
Television showed Japanese prosecutors going into one of the offices of Ozawa, the leader of the Democratic Party, which polls show has a good chance of ousting the long-ruling Liberal Democratic Party (LDP), now deeply unpopular with voters.
Kyodo news agency reported that prosecutors had arrested one of Ozawa's secretaries who managed accounts at a political group supporting the leader on suspicion of accepting donations illegally from companies.
The news put some pressure on the yen, currency traders in London said, as it reinforced worries about Japan's political system as it fight its worst recession since World War 2.
"The question is, will Ozawa have to resign? I think he is likely to have to quit," said Hirotaka Futatsuki, an independent commentator.
"I don't think he can hold on because as the election approaches, he would keep being criticised over this."
The Tokyo District Prosecutors Office declined to comment on the case but Yukio Hatoyama, the Democrats' secretary-general, quoted Ozawa as saying there had been no problems.
Public broadcaster NHK said the secretary denied the allegations.
Prime Minister Taro Aso, whose popular support has dropped below 10 per cent in one poll and is not much higher in others, is struggling to hold on to his job in the face of opposition parties' control of parliament's upper house, where they can can delay bills.
Speculation about Aso's future grew when the finance minister quit last month, after being forced to deny he was drunk at a G7 news conference in Rome.
The political stalemate and voters' frustrations with Aso after a series of gaffes and policy flip-flops had raised the chances for Ozawa to lead his party to victory in the next election due by October, ending more than 50 years of nearly unbroken LDP rule.
Analysts said the new scandal could upset those calculations, unless the scandal spread to the ruling bloc as well.
Kyodo said a group managing Ozawa's political funds had accepted 14 million yen ($NZ294,490) in donations from organisations run by former officials at a scandal-tainted construction company.
Another group headed by Ozawa had accepted 10 million yen from the same groups. The former construction company officials have also been arrested, Kyodo said.
Under Japanese law, companies can only donate money to a political party or groups managing funds for a political party.
Reuters
Television showed Japanese prosecutors going into one of the offices of Ozawa, the leader of the Democratic Party, which polls show has a good chance of ousting the long-ruling Liberal Democratic Party (LDP), now deeply unpopular with voters.
Kyodo news agency reported that prosecutors had arrested one of Ozawa's secretaries who managed accounts at a political group supporting the leader on suspicion of accepting donations illegally from companies.
The news put some pressure on the yen, currency traders in London said, as it reinforced worries about Japan's political system as it fight its worst recession since World War 2.
"The question is, will Ozawa have to resign? I think he is likely to have to quit," said Hirotaka Futatsuki, an independent commentator.
"I don't think he can hold on because as the election approaches, he would keep being criticised over this."
The Tokyo District Prosecutors Office declined to comment on the case but Yukio Hatoyama, the Democrats' secretary-general, quoted Ozawa as saying there had been no problems.
Public broadcaster NHK said the secretary denied the allegations.
Prime Minister Taro Aso, whose popular support has dropped below 10 per cent in one poll and is not much higher in others, is struggling to hold on to his job in the face of opposition parties' control of parliament's upper house, where they can can delay bills.
Speculation about Aso's future grew when the finance minister quit last month, after being forced to deny he was drunk at a G7 news conference in Rome.
The political stalemate and voters' frustrations with Aso after a series of gaffes and policy flip-flops had raised the chances for Ozawa to lead his party to victory in the next election due by October, ending more than 50 years of nearly unbroken LDP rule.
Analysts said the new scandal could upset those calculations, unless the scandal spread to the ruling bloc as well.
Kyodo said a group managing Ozawa's political funds had accepted 14 million yen ($NZ294,490) in donations from organisations run by former officials at a scandal-tainted construction company.
Another group headed by Ozawa had accepted 10 million yen from the same groups. The former construction company officials have also been arrested, Kyodo said.
Under Japanese law, companies can only donate money to a political party or groups managing funds for a political party.
Reuters