In his New Year news conference Monday, Prime Minister Yukio Hatoyama mentioned “protecting (people’s) lives” several times. This represents his attempt not only to stress that his administration cares about people’s lives but also to show his recognition that people’s lives have been made difficult by the current economic downturn.

He declared that to prevent the Japanese economy from falling into a second dip, he will do his utmost to have the fiscal 2009 supplementary budget and the fiscal 2010 budget enacted on schedule during the coming regular Diet session, expected to start Jan. 18. Along with economic issues, Mr. Hatoyama’s caliber as a leader will be tested on at least two other fronts.

One is related to political funds. Mr. Hatoyama will have to face stinging questions from opposition forces in the Diet session. He must fully explain the circumstances of his political funds situation, including how his office used ¥1.26 billion provided by his mother from 2002, so that people will feel that he has been sufficiently forthcoming about the matter. In addition, Democratic Party of Japan Secretary General Ichiro Ozawa also has problems linked to political funds.

Also key is the relocation of the U.S. Marine Corps’ Futenma Air Station in Okinawa Island. Mr. Hatoyama has set May as the deadline for making a decision. At the news conference, he promised to reach a conclusion that will satisfy both Okinawans and the United States. The hurdle is high. He should mobilize all the resources available to find a solution by May. Otherwise, Japan’s relations with the U.S. could suffer great damage.

The Upper House election in the coming summer will be a moment of truth for Mr. Hatoyama and the DPJ. A crucial job for Mr. Hatoyama will be making the DPJ’s campaign promises appear theoretically coherent and feasible in terms of funding. He must exercise leadership in this task. He should also avoid the impression that he is under the control of Mr. Ozawa by having transparent communication with him.

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