World News

Nikkei rises to 1.5 week high; suspected scandal caps earlier gains

Nikkei rises to 1.5 week high; suspected scandal caps earlier gains

Finance Minister Taro Aso is under pressure after his ministry altered documents tied to a controversial land sale.

The Finance Ministry has admitted it altered the contents of a document pertaining to its sale in 2016 of a plot of land in western Japan at a heavily discounted price to a school operator linked to Abe's wife Akie.

One such reference was to Akie's visit to the school at the heart of the suspected scandal.

"The Cabinet won't resign en masse".

"We will carry out the investigation to make the whole picture clear".

Japan's Prime Minister Shinzo Abe (L) and his wife Akie at Haneda Airport in Tokyo, Japan February 28, 2017. "Let's put an end to moves that submit politics to private interests".

The issue past year sharply eroded Abe's popularity.

Until now... because as the Japanese press reported over the weekend, the Moritomo scandal involving PM Abe's connections with the operators of the right-leaning school implicated in fraud are again roiling markets in Japan.

Aso told a separate news conference that several officials at his ministry's division in charge of the sale were involved in altering the documents to make them conform with testimony in parliament by the then-head of the division.

Although market reaction to the Abe scandal has so far been limited, market players say more signs of trouble for the government will likely dent expectations that he will win his third term as the head of the ruling party and thus prime minister later this year and continue his aggressive stimulus.

Aso denied there had been any political pressure, but declined to disclose where the instructions came from and who was responsible.

Fourteen of the original documents were rewritten by the ministry, Aso said. "What became clear is that they debased democracy", by lying to parliament, said opposition lawmaker Renho, who uses one name.

The 77-year-old Aso, who doubles as deputy premier and whose backing is vital for Abe, apologized for his ministry's actions, but said that he had no intention of stepping down.

"At the very least, it seems that Mr Aso's chances of surviving as Finance Minister are diminishing rapidly", Tobias Harris, vice president of consultancy Teneo Intelligence, wrote in an email.

Shinzo Abe acknowledged the new revelations "could undermine trust in the entire government" and added: "I deeply apologise to the people", said a report in The Guardian.

On Friday, National Tax Agency chief Nobuhisa Sagawa abruptly resigned over his remarks in parliament about the case.

Mr Sagawa headed the ministry division that submitted the documents before he was tapped as tax agency chief in July, an appointment critics saw as a reward for his efforts to diffuse the issue with his statements to Parliament previous year.

Some LDP members said politicians should not pass the buck to bureaucrats.