Japanese minister may skip G20

Cover-up allegations derailing plans of ruling party

Japanese Finance Minister Taro Aso was preparing to skip a Group of 20 finance leaders’ gathering in Buenos Aires next week, officials said on Tuesday, with the minister fighting to survive a cronyism scandal that has paralyzed parliament.

Premier Shinzo Abe and Aso, his close ally, are under pressure over the finance ministry’s admission that it had altered records of a discounted sale of state-owned land to a school operator with ties to Abe’s wife.

The suspicion of a cover-up has rocked the ruling Liberal Democratic Party and could dash Abe’s hopes of winning a third term as party leader at a vote in September. Losing the party leadership would ruin Abe’s chances of becoming Japan’s longest-serving premier.

Opposition lawmakers are calling for Aso to step down to take responsibility, and some analysts believe his resignation could be inevitable.

When asked whether he may skip the G20 on March 1920, Aso told reporters on Tuesday the decision will depend on the “present parliamentary situation.”

“It is important to fully cooperate with the ongoing investigation. To prevent a recurrence, we’ll continue to look into the matter and do the utmost to regain [public] confidence,” Aso said, signalling his intention to ride out the storm.

The scandal has already caused a stalemate in parliament, with opposition parties threatening to boycott a debate on next fiscal year’s budget, potentially delaying reforms to boost long-term economic growth.

“It will probably be difficult for the finance minister to travel overseas at this time,” an LDP lawmaker said on condition of anonymity.

Other government and ruling party officials also said Aso was likely to stay home, and let Masatsugu Asakawa, Japan’s top financial diplomat, attend the G20 meeting in his place.

The logjam in parliament could also leave two Bank of Japan deputy governor posts vacant when the incumbents’ terms end on March 19, as the appointments need lawmakers’ approval.

“The firestorm surrounding the cover-up and the land sale will continue to inhibit the administration’s ability to move its agenda through the Diet,” said Tobias Harris, vice president at Teneo Intelligence, a global advisory firm.