Japan’s Chief of Finance Will Resign

Japanese Finance Minister Kiichi Miyazawa, the 79-year-old party elder drafted to organize an economic recovery, said Friday that he will step down after only four months on the job.

Miyazawa, a former prime minister who also served as finance chief in the 1980s, said he will also quit as head of a major faction in the governing Liberal Democratic Party.

“I have been telling senior members of my faction that I’m ready to hand over my position as faction head,” Miyazawa told reporters. “Once I resign, it wouldn’t be appropriate to stay in the Cabinet.”

It was unclear when that will happen. News reports Friday quoted Miyazawa as having said he planned to stay put until work is completed on Japan’s 1999 fiscal-year budget, expected next month.

But Miyazawa later told reporters that he hasn’t decided exactly when he will step down as faction head. He said he will time the move so that it doesn’t affect the passage of crucial bills aimed at jump-starting the economy.

“I am well aware of the very difficult situation the Japanese economy is now facing. Thus I will see that [my resignation] will not cause any delay” in economic stimulus steps, Miyazawa said.

Japan is battling its deepest recession since World War II. When Prime Minister Keizo Obuchi took office in July, he turned to Miyazawa for his long experience in finance and economics.

Miyazawa’s return as head of the powerful ministry was heralded by some commentators. Others, however, criticized the move, blaming Miyazawa for fueling Japan’s asset-inflated economic “bubble” in the late 1980s, the eventual collapse of which is still hurting the nation’s economy.

Separately Friday, Japan’s trade ministry said industrial output in October fell a smaller-than-expected 1.2% compared with the previous month, but that there are few signs of a strong rebound.

The Ministry of International Trade and Industry characterized the situation as “stagnant,” leaving its assessment unchanged from last month.

Economists had forecast a 1.5% decline in seasonally adjusted production at Japan’s factories and mines. The government had projected a 1.1% drop.

In September, output climbed 2.5%.

Japan’s jobless rate was stagnant too. The rate stood unchanged in October at a record 4.3% for the third straight month, the Management and Coordination Agency said.