• Compiled From Kyodo, Staff Report

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Prime Minister Naoto Kan on Wednesday suggested he may sideline his idea of raising the consumption tax.

Kan told reporters the issue of whether a tax hike should be an option for fixing Japan’s tattered finances is being discussed by a key government panel and the policy council of his Democratic Party of Japan and he will “wait” for the results of their deliberations.

“I presume there will be many opinions,” Kan said at his office when asked if he had already ruled out a tax hike.

The ruling DPJ lost seats in the July Upper House election after Kan suggested using the Liberal Democratic Party’s proposal to raise the 5 percent sales tax to around 10 percent if the main opposition force refused to participate in bipartisan debate on tax reform to restore the country’s precarious fiscal health.

Kan appeared to support the LDP’s plan when he called for the launch of cross-party discussions on the matter. But he told reporters Wednesday his explanation at the time was confusing and he would leave any decision on the matter to the ruling party.

Earlier in the day, Kan was forced to go on the defensive on the opening day of the Upper House Budget Committee session, prompting the opposition camp to question his leadership and ability to manage a divided Diet.

“It is difficult to sense the prime minister’s determination,” although Kan chose to take the difficult path of facing the Diet despite the Upper House election loss, LDP lawmaker Yoshimasa Hayashi said during the session.

“I question whether Mr. Kan has the resolve or any leadership,” Hayashi added.

Kan’s DPJ-led coalition lost a majority in the upper chamber in the July 11 election. Kan, who kicked off the extraordinary Diet session Monday, has so far avoided clashing with the opposition camp by adopting a moderate tone.

On Wednesday, he expressed his determination by stating he has an “indomitable resolve” to restore Japan’s fiscal balance. But he focused on avoiding any slipups as the opposition camp grilled him.

Asked whether DPJ kingpin Ichiro Ozawa should testify at the Diet over his political funds scandal, Kan said the issue is not up to him to decide. “It is more appropriate for the Diet to discuss the matter,” he said, effectively avoiding the topic.

Kan also gave a noncommittal response on whether the government is preparing a statement of apology ahead of the centennial of the Japan-Korea Annexation treaty.

“At this point, we are giving careful consideration” to a statement, Kan said, only adding that South Korea “is the most important neighboring country for Japan, and strengthening bilateral ties is imperative.”

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