Japan PM apologises for giving out gifts, clouding budget prospects

TOKYO — Japanese Prime Minister Shigeru Ishiba apologised on Friday (March 14) for giving gift certificates to some ruling party lawmakers, a move that could hurt his administration's already low approval ratings and risk delaying passage of next fiscal year's budget.

The political uncertainty could cast doubt on Ishiba's leadership ahead of an upper house election set for July, and comes at a time when Japan's economy faces headwinds from the escalating trade war waged by US President Donald Trump.

"Market volatility is heightening on uncertainty over US and European economic policies. But now, market players may need to look more carefully at domestic political developments," said Yusuke Matsumoto, senior market economist at Mizuho Securities.

Speaking in parliament, Ishiba said he used "pocket money" to hand out gift certificates to 15 lawmakers of the Liberal Democratic Party (LDP) before having dinner with them on March 3 as a "show of appreciation" for their hard work getting elected.

Domestic media reported on Thursday that Ishiba handed gift certificates worth 100,000 yen (S$900) each to the lawmakers. When asked by reporters later on Thursday whether he may step down, Ishiba said only that the gifts did not violate any law, according to the Nikkei newspaper.

"My action caused distrust and anger among many people, for which I deeply apologise," Ishiba told parliament on Friday in response to a question by a ruling party lawmaker.

While Ishiba said the move was not illegal as it was a personal gift with no political intentions, it drew criticism even from within the LDP's coalition partner and calls from some opposition parties for him to resign.

The gift issue adds to challenges for Ishiba's minority coalition,