Japan’s economy minister resigns over money scandal

Japanese prime minister Shinzo Abe is facing the biggest scandal of his three-year administration following the resignation of his economics minister.

Akira Amari, one of the key architects of the government's strategy for reviving Japan's moribund economy, is fighting claims that he received cash for favours.

Mr Amari dramatically quit during a live press conference on Thursday evening. Wiping away tears, he apologised and said he had to take responsibility for the graft scandal.

“The economy is now on the verge of getting out of deflation after 15 years,” he said.

“We need to pass legislation through parliament for steps to beat deflation and create a strong economy as soon as possible.

“Anything that hampers this must be eliminated, and I’m no exception.”

A weekly magazine has accused Mr Amari and his staff of taking cash and gifts from a construction company.

The magazine said the payments amounted to over 12 million Japanese yen (€92,577) and that the minister had personally pocketed some of the money.

Mr Amari denied the claims and insisted he had no memory of receiving the money. He said his political secretary had dealt with the donation.

“Putting money in my suit pocket in front of a visitor... would be lacking dignity as a human being,” he told the press conference.

But he added that he would quit “in consideration of my responsibility to oversee my secretary…my duty as a minister, and my pride as a politician.”

Mr Abe has lost three other cabinet members through scandal since taking office in late 2012 but Mr Amari has by far the highest profile.

He is widely credited with helping to engineer Abenomics, the government’s strategy for beating the inflation that has dogged the world’s third largest economy for years.

He was also the key mover behind a giant trade deal called the Trans-Pacific Partnership, which he was due to sign in New Zealand next month.

The resignation is a blow to Mr Abe’s government, which is struggling to hit the two per-cent inflation target it set a taking office in December 2012. Japan’s economy barely dodged a technical recession in the last quarter and many analysts predict a bumpy ride this year.

Mr Abe’s policies have helped drive down the yen and push up the value of Japan’s stock market, boosting corporate profits. But that strategy may be unravelling.

The Nikkei stock average has lost over 20 per cent since its peak last year and the yen is again rising in value.

The government faces an election in the summer.

Political opposition is divided and struggling to counter the popularity of Mr Abe’s coalition government.

Opinion polls taken as the claims against Mr Amari unfolded this week suggested the government had so far weathered the scandal. The long-term impact remains to be seen.