Kan Closer to Quitting with Budget Funding Settled

Japan’s Prime Minister Naoto Kan moved closer to resigning after opposition parties agreed to back legislation to finance this year’s budget, a condition set by the premier for leaving office.

Kan’s Democratic Party of Japan along with the Liberal Democratic Party and New Komeito will pass a bill to sell bonds to finance government spending “without delay,” according to a joint statement given to reporters yesterday in Tokyo. The parties also agreed to scrap reduced highway tolls, and will postpone a review of benefits to high school students and farm subsidies until the next fiscal year, the statement said.

“The measure has been a factor in a political game and that’s finally over,” said Chotaro Morita, chief strategist at Tokyo-based Barclays Capital Japan Ltd. “The market’s attention will be on who would be the next prime minister, especially because some candidates look like they are against raising taxes for fiscal health.”

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