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Race for Japan's finance ministry hots up

Prime Minister Ryutaro Hashimoto agreed to appoint a new finance minister during a meeting with five senior officials of the Liberal Democratic Party (LDP), party officials said.

Mr Hashimoto assumed the post of acting finance minister after the resignation of Hiroshi Mitsuzuka after the arrest on Monday of two finance ministry officials over a bribery scandal.

Mr Koizumi and Mr Kajiyama are thought to be the strongest candidates to fill the finance ministry seat as both have the influence needed to push through legislation seen as crucial to revive the nation's ailing economy.

Mr Kajiyama, a tough and outspoken veteran of the LDP, backed Mr Hashimoto's administration last year as chief cabinet secretary. He resigned the position last September in the latest cabinet reshuffle.

Mr Koizumi, also known for his straightforward character, took the lead in a full-scale reform of the nation's health insurance system. He is one of the senior members of an LDP faction led by Mr Mitsuzuka.

Some market analysts tipped former premier Kiichi Miyazawa as a likely successor to Mr Mitsuzuka.

Mr Miyazawa was considered a good candidate by the markets, given that he had come up with the idea of injecting public funds to sort out the huge mess of bad loans run up by housing loan companies in 1992.

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