Japan's Cabinet resigns to make way for new PM

Japanese Prime Minister Yoshihiko Noda's Cabinet resigned on Wednesday to clear the way for a vote in parliament to formally install the nation's new leader.Shinzo Abe, a conservative whose nationalist positions have in the past angered Japan's neighbors is likely to be named prime minister later on Wednesday.      

Noda's fall ends more than three years at the helm for the left-leaning Democratic Party of Japan and brings back the more conservative, pro-big business Liberal Democratic Party, which governed Japan for most of the post-World War II era until voters, fed up with scandals and Japan's sagging economy, tossed them out in 2009.      

In announcing the resignations, the chief government spokesman said the incoming government will face many tough issues and said he hoped they would deal with them "appropriately."    

Capitalizing on the Democrats' failure to improve the economy and its perceived lack of strong leadership, Abe led the Liberal Democratic Party to victory in parliamentary elections on 16 December.  

He was also prime minister in 2006-2007. 

The Japanese economy has been stuck in deflation for two decades. Since the Liberal Democratic Party won the elections, the nation has high expectations for a recovering economy. 

Asian stock markets rose on Wednesday as traders snapped up stocks before the end of the year, while the Tokyo benchmark neared a high for the year after Abe's pro-business government prepared to assume leadership in a country plagued for years by economic lethargy. 

Japan's Nikkei 225 index gained 0.4 percent to 10,122.82 as a further weakening yen gave momentum to the country's major exporters on Wednesday.     

The benchmark's highest intra-day level of the year, 10,255.15, was reached on March 27.     

Abe has put pressure on the Bank of Japan to raise its inflation target from one to two percent to extricate the country from two decades of deflation - continually dropping prices - which has deadened economic activity.


APTN