Diplomatic coup before election eluded Noda

Kyodo

Prime Minister Yoshihiko Noda was unable to achieve a breakthrough in improving ties with China and South Korea during his trip to Cambodia, ahead of a tough Dec. 16 Lower House poll.

Noda attended a series of summits related to the Association of Southeast Asian Nations from Monday, only a few days after he dissolved the House of Representatives for a general election that recent polls indicate could unseat his Democratic Party of Japan from power after a three-year run.

In the runup to the Lower House election on Dec. 16, Noda may have been hoping for a diplomatic success by mending relations with China and South Korea, which have been worsening over territorial disputes, political pundits said.

Trade ministers from Japan, China and South Korea declared the start of negotiations for a trilateral free trade agreement, but Noda did not hold formal bilateral talks with Chinese Premier Wen Jiabao or South Korean President Lee Myung Bak during his stay in Phnom Penh.

Noda only chatted with Lee on the sidelines of a luncheon, without discussing their row over islets in the Sea of Japan, Japanese officials said.

“Who would like to talk with a prime minister who could be ousted from power soon?” a source familiar with Japan-China relations said, adding Noda’s visit to Cambodia was “merely his graduation trip.”

Wen is expected to resign next spring. South Korea is scheduled to hold a presidential election Dec. 19, with Lee’s successor to be inaugurated in February.

With Noda’s DPJ facing possible defeat at the upcoming election, it appears unlikely Japan can make much progress in improving ties with its neighbors under the current leadership.

Meanwhile, criticism of Noda’s decision to travel abroad immediately after dissolving the Lower House grew even within the ruling camp.

“It’s rude for a person who dissolved (the Diet) to carry out diplomatic activities,” said Mikio Shimoji, a Cabinet member from the DPJ’s ally, Kokumin Shinto (People’s New Party).

Political analyst Norio Toyoshima said, “Mr. Noda’s attempt to boost public support (for the Cabinet) by producing a diplomatic achievement ended up a failure.”

Instead, during Noda’s trip to Cambodia, “media attention completely turned to” Shinzo Abe, head of the Liberal Democratic Party, Toyoshima added.

While Noda was away, Abe reiterated that if the LDP takes power, he will urge the Bank of Japan to set its key policy interest rate below zero and demand that the BOJ purchase government construction bonds as a way of beating deflation, helping drive stock prices higher.

After Noda pledged last Wednesday to dissolve the Lower House last Friday, the Nikkei average rose for three straight trading days by up to 2.2 percent on a daily basis.

Recent opinion polls by the media show the LDP leading the DPJ in voter support, which could see Abe, a former prime minister, regain that post.

“The market is waiting for an LDP-led government to carry out its economic and monetary policies,” Abe said in a speech Saturday.

But given his hawkish diplomatic stance, and its potential to irritate neighboring nations such as China, Japan’s biggest trading partner, it is uncertain whether Abe will be able to shore up the economy if he stages a comeback, analysts said.

If Abe becomes prime minister, it would be “inevitable” for tensions between Japan and China triggered by the dispute over the Japan-administered Senkaku Islands “to be protracted,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“The headwind could continue to blow against the Japanese economy and businesses, which are largely dependent on Chinese demand,” Fujito added.

Japan marked a ¥549 billion trade deficit in October, the worst for the month, as exports to China and Europe remained weak on soured relations with the Asian neighbor over the territorial dispute and the sovereign debt crisis in the eurozone, government data showed Wednesday.

Tokyo-Beijing relations have been strained since Noda’s government in September purchased some of the Senkaku islets in the East China Sea from their Japanese owner, a development that has since undermined business ties between the world’s second- and third-largest economies.

The uninhabited islets, called Diaoyu in China, are administrated by Tokyo, but claimed by Beijing.