17 Sep 2009

Hatoyama promises economic revival for Japan

4:16 pm on 17 September 2009

Japan's new prime minister has promised economic revival, a "people-oriented society" and trusting ties with America.

At his first news conference, hours after taking office, Yukio Hatoyama said: "I want to create the kind of politics in which politicians take the lead without relying on bureaucrats..."

Mr Hatoyama, who is 62, was wearing his lucky gold, silver and blue striped tie and signature pocket handkerchief. Last month, his Democratic Party of Japan won a sweeping election victory, ending 50 years of almost unbroken Liberal Democratic Party rule.

His untested government, now in charge of the world's second biggest economy, faces pressure to make good on promises to focus spending on consumers, cut waste and reduce bureaucrats' control over policy while reviving an economy just emerging from its worst recession in 60 years.

Managing ties with the United States while charting a more independent course will be a further priority.

Choice of finance minister eases market fears

Mr Hatoyama's choice of the veteran law maker Hirohisa Fujii as finance minister soothed some market concerns about government spending and the debt burden.

Even before Mr Fujii was sworn in, the yen jumped 0.9% to a new seven-month high against the US dollar, after he said that a strong yen had merits for the economy.

On the other hand, the choice of Shizuka Kamei, the outspoken head of a tiny coalition partner and an opponent of market-friendly reforms, as minister for banking and market regulation sent bank shares lower with his comments on lending.

"I want to work with all my strength to rebuild Japan, which has been shaken by survival-of-the-fittest market fundamentalism," Mr Kamei told a news conference.