TOKYO — Japanese Prime Minister Naoto Kan is preparing to resign in the coming days, according to Kyodo news agency.
Kan said he will step down once parliament passes two key bills, including a second extra budget, Kyodo reported, citing cabinet ministers. The report stated that Kan’s ruling Democratic Party of Japan will select a new leader August 30. A spokesperson for Kan could not be reached for comment.
Pressure has been mounting on Kan to resign. The unpopular leader has been criticized for lacking strong leadership as Japan recovers from the devastating earthquake and tsunami. The country is also grappling with a series of economic challenges including an extremely strong yen that is denting exports.
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Both former foreign minister Seiji Maehara and finance minister Yoshihiko Noda are considered contenders to replace Kan as prime minister.
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Takahiro Sekido, Crédit Agricole Securities Asia B.V.’s executive director and chief economist for Japan, said Noda’s appointment would speed up economic stimulus measures. But based on past experience with leadership changes in Japan, he doesn’t predict much of an impact on consumers.
“It will not have [a great] influence [on consumer behavior],” he said.
Kenichi Kawasaki, managing director and senior political analyst for Nomura Securities Co., Ltd.’s economic research department, said a change in leadership could generate positive results.
“Of course for any country it is never good to replace [the prime minister] in the middle of a term, but for Japan, and particularly at this point, people may welcome such a change,” he said.
Japan’s gross domestic product contracted 1.3 percent on an annualized basis in the second quarter but economists are expecting a rebound in the third and fourth quarters of the year.