Japan's Mori Re-Elected, Names Cabinet

T O K Y O, July 4 -- Prime Minister YoshiroMori was re-elected by parliament today and quicklyannounced a new Cabinet charged with ensuring Japan’s economicrecovery stays on track.

But even before the Cabinet lineup featuring familiar facesin key posts was announced, speculation bubbled that Morihimself may have trouble hanging onto his post.

Analysts said it was too soon to predict the prime ministerwould lose his job in coming months. But he is fresh from anelection setback and faces a more confident opposition,criticism over a new scandal and a controversial corporatebailout.

The pitfalls ahead are many, and the unpopular Mori couldface tough going once a July 21-23 Group of Eight summit ofthe richest industrialized nations and Russia has passed.

He kept Finance Minister Kiichi Miyazawa, Economic PlanningMinister Taichi Sakaiya and Foreign Minister Yohei Kono onboard, as expected, to handle the summit.

Cabinet Adrift

Opposition parties kept up a drum beat of criticism.

“Despite the fact that Japan is confronting the majorchallenge of structural reform, it is unclear what the newcabinet is trying to accomplish,” said Tsutomu Hata,secretary-general of the main opposition Democratic Party.

“The second Mori Cabinet is a Cabinet adrift,” Hata said.

The current Cabinet is expected to last only until January,when the number of ministries will be cut to 12 from 22 as partof a sweeping government reorganization.

Mori himself got some good news and some bad today.

The Bank of Japan’s key “tankan” survey showed thatbusiness sentiment improved sharply in the three months to June,with an index measuring confidence at large manufacturers risingto plus-three, the first positive reading since September 1997.

But the “tankan” portrayed a two-tiered economy ofglobally competitive manufacturers and cosseted smaller firmsand non-manufacturers still mired in their worst postwardownturn.