Japan's 'Abenomics' Minister Amari to resign over graft scandal

[TOKYO] Japanese Economy Minister Akira Amari, a key engineer of the government's "Abenomics" program, said he was resigning after a week fending off allegations of financial impropriety.

Mr Amari is the most influential minister to resign since Prime Minister Shinzo Abe took office in December 2012. Japan's point man in the Trans-Pacific Partnership regional trade talks, Amari also spearheaded Abe's growth strategy to boost the nation's competitiveness.

A tearful Mr Amari apologized for the scandal, saying it had caused embarrassment. He said any cash received was a political donation but that he must take responsibility for what happened in his office under his watch.

An article published in the weekly Shukan Bunshun magazine last week said Mr Amari and his staff took money from an unidentified Chiba prefecture-based construction company in an alleged violation of a political funding law. The payments amounted to at least 12 million yen (S$144,079), the magazine said, adding there were no details of them in Mr Amari's political funding record.

A follow-up piece in the magazine published Thursday quoted a representative of the firm as saying Mr Amari twice pocketed envelopes containing 500,000 yen in cash. It claimed that further unrecorded payments were made, bringing the total to tens of millions of yen.

With the yen strengthening to a one-year high last week, and exports falling faster than expected in December, the resignation comes at a critical time for the Abenomics project, which is aimed at pulling the world's third-largest economy out of deflation. The loss of Amari could prove a headache for Abe in the run-up to elections in parliament's upper house this summer.

He's the fourth minister to resign over allegations of financial impropriety. None were as important to Mr Abe's cabinet as Mr Amari, who completed tough negotiations with the US over the TPP trade deal even after battling cancer of the tongue. Mr Amari had been expected to travel to New Zealand for the signing of the trade deal by the 12 countries involved on Feb. 4.

While Mr Abe recovered from previous resignations to win a snap general election by a landslide in December 2014, a series of scandal-linked resignations contributed to the unraveling of his first administration in 2007 after less than a year.

BLOOMBERG