Over the past month since Prime Minister Yukio Hatoyama assumed office, a controversial plan for a moratorium on debt repayments by small companies has hurt financial shares and uncertainty regarding the capacity of the new government has weighed on the stock market.
But while remarks by financial services minister Shizuka Kamei and Finance Minister Hirohisa Fujii have already sent reverberations through the stock and currency markets, most analysts remain hopeful for a smoother run once the fiscal 2010 budget is compiled and economic stimulus measures are put in place.
"While global stock markets have soared, Japan is the only one still lagging," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities Co.