Japan: road rage

Embattled Japanese Prime Minister Yasuo Fukuda has run into difficulties renewing a set of special tax measures that are set to expire on Monday.  

The opposition has clashed with the ruling coalition over the details of road-related tax measures, with the opposition hoping to attract support by offering lower petrol prices.   Failure to reach an agreement this week would see the price of petrol fall by approximately 25 yen per litre.  This would translate into a revenue loss for the government of around $26 billion dollars annually. 

The political stalemate is the latest in a litany of troubles that has seen Fukuda's approval rating plummet from 59% when he took office to under 25% now.  Fukuda has resisted opposition calls for an early election, at least before he hosts the G8 summit in July. Yet a poll may come sooner rather than later. The slide in Fukuda's support comes amid a deterioration in business sentiment, and the prime minister's inability to name a new governor to the Bank of Japan has left the business community increasingly sceptical about his ability to respond to the economic challenges facing the country.