FOCUS: Figure of Ozawa looms again behind Fujii's resignation+

TOKYO, Jan. 6 Kyodo - Ichiro Ozawa, the influential secretary general of the Democratic Party of Japan, has already been in the headlines during Prime Minister Yukio Hatoyama's four months in government, and his name cropped up again when Hirohisa Fujii
decided to step down as finance minister.

Fujii, 77, one of the few experienced ministers in Hatoyama's Cabinet, tendered
his resignation on Wednesday, saying he feels exhausted after all the hard work
involved in the compilation of the fiscal 2010 budget and not well enough to
stay in the post.
Hatoyama had initially insisted that he stay on to handle parliamentary
deliberations on the budget that are set to begin later this month, but
eventually accepted Fujii's decision.
Eiken Itagaki, an independent political analyst well informed about the DPJ,
said his resignation ''may not deal so heavy a blow to the administration, but
will provide material to provoke unnecessary, damaging speculation.''
In fact, there has already been speculation that Fujii's departure is deeply
linked with his relationship with Ozawa, which is believed to have gone sour
since around last spring.
According to one DPJ lawmaker, Fujii was fed up with Ozawa, who complained that
Fujii depended too heavily on the Finance Ministry in drawing up a budget
proposal and prioritized fiscal discipline over bold spending to boost the
flagging economy.
Fujii, a former finance bureaucrat, and Ozawa, left the Liberal Democratic
Party together in 1993, and Fujii had always supported and been loyal to Ozawa
since then.
But their relationship became shaky, according to some DPJ members, after Fujii
suggested that Ozawa voluntarily relinquish the post of DPJ president when he
faced a funding scandal in April last year.
Since Ozawa was hoping at that time to be able to form a new government by
winning the House of Representatives election later that year, that suggestion
by someone he had believed to be one of his most devoted friends seemed to
''call forth his wrath,'' according to Itagaki.
Fujii had expressed his intention of retiring from politics before the August
election, in which the DPJ won a landslide victory to end a half-century of
almost unbroken rule by the LDP.
But Hatoyama, who has led the DPJ since May, urged Fujii to run in the election
and tapped him as finance minister after the election victory.
Ozawa, however, was opposed to the appointment, according to DPJ lawmakers,
noting that Fujii was a former finance bureaucrat and would not be able to
achieve one of the DPJ's key campaign pledges -- returning power from
bureaucrats to the central government.
There is also a view among some lawmakers in the LDP, which is now the main
opposition party, that Fujii wanted to avoid appearing at the Diet out of fear
that that he would be grilled by the LDP over alleged accounting irregularities
dating back to the 2003 merger between the DPJ and the Liberal Party, of which
Fujii was then secretary general.
On Wednesday, Hatoyama appointed Deputy Prime Minister Naoto Kan to serve
concurrently as finance minister. The appointment has already been welcomed by
some economists.
Takahide Kiuchi, chief economist at Nomura Securities Co., said in his report
that a shift from Fujii, who has pursued fiscal health, to Kan would mean a
shift to a greater focus on economic recovery than on fiscal discipline.
''As the House of Councillors election is coming up in July, it is highly
likely that additional fiscal spending would be considered under the initiative
of Secretary General Ozawa,'' if the economic situation remains severe, Kiuchi
said.
''Given the relationship with Secretary General Ozawa, there will be a higher
possibility that Finance Minister Kan would accept such a policy,'' he said,
suggesting such prospects could lead to a surge in stock prices and a decline
in bonds.