Japanese Prime Minister Naoto Kan is facing a backlash from ruling party lawmakers over plans to raise taxes to pay for earthquake reconstruction, adding to concern he will be unable to contain the world’s largest debt.
Japan’s parliament passed two pieces of legislation that Prime Minister Naoto Kan said were conditions for him to resign as early today, setting up a succession battle that will play out by early next week.
Japan’s sovereign-rating outlook was cut to “negative” by Standard & Poor’s as the nation’s reconstruction needs following last month’s earthquake will likely add to what’s already the world’s biggest debt load.
A cross-party group of senior Japanese lawmakers said Prime Minister Naoto Kan shouldn’t raise taxes to pay for rebuilding from last month’s earthquake, and called on the central bank to buy more government bonds instead.
Japan’s Finance Minister Yoshihiko Noda joined former Foreign Minister Seiji Maehara in vying to become the next prime minister, as the downgrade of the country’s credit rating adds pressure on the country’s next leader to deal with the world’s largest public debt burden.