ASIA : ‘Fresh Image’ of Japan Premier Wilts Amid Probe, Problems : Once the symbol of reform, Hosokawa now raises eyebrows.

Once again, the Japanese prime minister stood in Parliament this week, facing relentless grilling from his political opposition over suspect loans and questionable stock deals.

What’s wrong with this picture?

The target was not a leader of the Liberal Democratic Party, whose scandal-sullied past helped push it out of power last summer for the first time in 38 years. It was Morihiro Hosokawa, political aristocrat and founder of the Japan New Party, who sailed into office last August brimming with confidence, idealism and a fresh, clean image.

The politician who came to symbolize political reform was himself being grilled now over whether he lied about a deal involving 300 shares of Nippon Telegraph & Telephone Co. stock purchased in 1986 and about a loan from the Sagawa Kyubin Co., a scandal-tainted trucking firm.

“The public supported him as the standard-bearer of change and political reform,” said Kojiro Shiraishi, an editorial writer specializing in politics for the Yomiuri newspaper. “But if he’s just the same as the LDP, why did people support him? It’s a matter of ethics, morality and credibility.”

Hosokawa claims that his father-in-law bought the stock, and that he himself had fully repaid the Sagawa loan in 1982. But his opponents--and the business consultant involved--charge that Hosokawa personally made the deal for himself. Opponents also say the Sagawa loan was actually an illegal political contribution.

Once hailed for his suave manner and brilliant public relations, Hosokawa lost his cool under the hostile questioning.

“Supposing it was my deal. What’s wrong with that?” he retorted. His defiant answer threw the parliamentary committee into an uproar, halting proceedings for the day.

Meanwhile, other problems are piling up, from troubled U.S.-Japanese relations to completing the 1994 fiscal year budget to implementing an effective economic stimulus policy. Hosokawa’s other initiatives, such as cutting red tape and shifting power back to the local governments, are going nowhere.

Serious cracks are rending Hosokawa’s eight-party coalition, and decision-making is said to be in chaos.

His public support ratings are steadily declining--from 69.6% last August to 47.6% in a survey published Tuesday by the Nihon Keizai newspaper. The Yomiuri newspaper found a drop from 72.4% in January to 55.1% last week.

Despite Hosokawa’s dynamic start, some people already are beginning to write his political obituary.

“Hosokawa’s fresh image was the biggest reason for his high public approval ratings, but they are being significantly affected by this personal scandal and the people’s disappointment is spreading rapidly,” said Minoru Morita, a political analyst. “It will be impossible for him to recover.”

Not that Hosokawa’s decline signals a public willingness to bring back the Liberal Democrats. According to the Nihon Keizai poll, 42% of people surveyed would still vote for coalition candidates in an election held today--compared to 22% for the LDP.

Hosokawa himself seems to have become a man simply marking time. These days, he reportedly eats alone and holes up in his office.

“His body is stiff and his face is pale,” the Nihon Keizai reported. “Bureaucrats who visit his office are surprised by the apathetic expression on his face.”