Tokyo: Japan`s leader on Monday stood by his conviction not to decide the fate of a US base before the end of the May, even though the nagging issue is further eroding voter support already hurt by a funding scandal.
Prime Minister Yukio Hatoyama seemed to have even less room to manoeuvre in the feud with Washington over the Marine base in Okinawa, southern Japan, after a candidate who opposes an existing plan to relocate it won a local election on Sunday.
The vote came a day after prosecutors questioned the kingpin in his Democratic Party over the funding scandal which is clouding the outlook for the annual budget from April 1, aimed at bolstering a fragile economic recovery.
Although Japanese media said an extra budget for the current year to March 31 was likely to be enacted given the risk of public backlash over policy delays, opposition parties have called for more debate on the scandal in parliament.
Concerns over the deliberations for the 2010/11 budget could weigh on Japanese stocks in the short term and also continue to cloud voter support for Hatoyama ahead of a mid-year election for Parliament`s upper house.
The Democrats need to win an outright majority in the upper house vote to reduce reliance on two small but vocal coalition partners who could add pressure for more spending and increase an already huge public debt, pushing up government bond yields.
Hatoyama brushed off concerns he could keep dithering over Tokyo`s dispute with Washington over the Futenma base, which has bred voter doubts about his four month-old government`s ability to manage relations with its top security ally.
"The government has promised to start from scratch and to be responsible in reaching a conclusion on this issue by the end of May," Hatoyama told reporters. "We will definitely fulfil that."
A weekend poll by broadcaster TBS showed the government`s approval rate at 46.4 percent, down 6.6 points from earlier this month and below the disapproval rate of 53.1 percent.
Hatoyama faces an increasingly tough decision on the airbase, which under a 2006 deal with Washington was to be relocated to the city of Nago in a less crowded part of the southern island.