Prime Minister Yukio Hatoyama's surprise announcement that he is stepping down before the July Upper House election is likely to deepen uncertainty about Japan's politics and raise more concerns about its still fragile economic recovery, economists and analysts said Wednesday.
The once popular Hatoyama announced his departure amid mounting criticism over flip-flops involving a deal to relocate a U.S. Marine base, as well as political funds scandals involving him and departing Democratic Party of Japan Secretary General Ichiro Ozawa.
"Investors cannot draw a positive picture of the economy, and their stance will not change even after his resignation because the political turmoil will deepen further," said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.