TOKYO, March 8 (Reuters) – An aide to a powerbroker in Japan’s ruling party publicly called for unpopular Prime Minister Naoto Kan to quit on Tuesday, adding to the leader’s woes as he faces pressure to step down or call a snap election.

The vice farm minister also floated the possibility of the premier resigning, media said, as Kan struggles to get a divided parliament to enact a $1 trillion budget from April while keeping his party from splintering.

Kenko Matsuki, a lawmaker close to Kan’s rival in the ruling Democratic Party of Japan (DPJ), criticized Kan for hanging on to his job.

“It is important that Prime Minister Naoto Kan resign as soon as possible,” Matsuki told reporters.

Matsuki’s call underscores the difficulties facing Kan, who suffered a fresh blow this week when his foreign minister abruptly quit over a political donation scandal and deepened the impression of a government in disarray.

Kan, whose public support rating has slumped to around 20 percent, has said that he wants to stay on and some analysts have said he may be able cling on to his post since it is unclear if the opposition would cooperate on policies even if he quit.

He is Japan’s fifth leader since 2006 and has no clear successor in sight after the resignation of the foreign minister, who had been a strong contender.

TOKYO (Reuters) – Japan’s idea for a new carbon offset scheme would complement an existing U.N. mechanism and make it easier for developing countries to access clean-energy technology from Japan, a senior climate envoy said on Wednesday.

Japan has pressed ahead with plans for bilateral deals in which it invests in clean energy projects in developing countries, in exchange for credits to meet part of targets to reduce greenhouse gas emissions at home.

The United Nations also runs a carbon offset scheme called the Clean Development Mechanism (CDM), but it has been criticized for being too complex and rigid while taking too long to approve projects.

Many developing countries have already expressed interest in Japan’s proposed bilateral scheme, which would be more user-friendly than the CDM, said Kenji Hiramatsu, director-general for global issues at Japan’s foreign ministry.

“We are very mindful that this mechanism will contribute to, to complement the international carbon trading system,” Hiramatsu told a seminar hosted by a Japanese think tank.

“How it will be connected to the international system, or CDM system, we are in the process of discussing amongst ourselves but I am convinced that some mechanism should be made.”

Europe, whose emissions trading scheme dominates the global carbon market, is also looking at the possibility of bilateral offset deals, while the United States has also floated the idea of bilateral agreements.

TOKYO (Reuters) – Japan’s government pushed through a $1 trillion budget for the year from April in the lower house on Tuesday, but some MPs from Prime Minister Naoto Kan’s own party boycotted the vote in a sign of his weakening clout.

Kan faces growing calls, including within his own ruling Democratic Party of Japan (DPJ), to step down and break a deadlock in a divided parliament where opposition parties have threatened to block bills needed to make the 2011/12 budget work.

The DPJ had enough votes in the lower house to pass the budget, but it needs approval from the opposition-controlled upper chamber to pass related bills, including one to allow issuance of deficit-financing bonds and another on tax reforms that would lower the effective corporate tax rate.

Failure to pass budget-related bills could cause a shutdown of parts of the government within months, similar to what happened in the United States in the 1990s, and increase the chance of a downgrade of Japan’s debt rating.

Kan held off submitting the related bills for the lower house vote after lawmakers from both camps shouted at each other and pounded tables in debate.

Kan, whose support ratings have sunk to about 20 percent, has few favorable options to break the deadlock, which is keeping him from dealing with issues such as huge public debt.

He has said an early election would only lead to uncertainty for the public and has rejected calls to quit. Kan, in office since last June, is already the fifth premier since 2006.

TOKYO (Reuters) – Japanese Prime Minister Naoto Kan’s government was trying to enact on Monday a $1 trillion budget for the fiscal year starting in April but had no prospect of passing bills needed to implement the spending in a divided parliament.

Kan wants parliament’s lower house, where the ruling Democratic Party of Japan (DPJ) holds a big majority, to approve the budget for 2011/12 later on Monday but plans to hold off on submitting related bills.

The budget itself can be enacted by parliament’s lower house alone. But related bills to implement the budget require approval of the upper chamber, where the opposition have threatened to use their majority to block legislation.

Failure to pass budget-related bills would cause a shutdown of some parts of the government as early as in the summer, similar to what happened in the United States in the 1990s, and increase the chance of a downgrade of Japan’s debt rating.

Kan, whose support ratings have sunk to about 20 percent, has been facing pressure from within and outside his party to either quit or call a snap election to break the deadlock, which is keeping him from dealing with issues such as huge public debt.

But he told parliament an early election would only lead to uncertainty for the public, while his top aide fended off the possibility of the leader quitting. Kan, who took over last June, is already Japan’s fifth premier since 2006.

“We are already doing our utmost to pass the budget and budget-related bills and we will work even harder to make sure our efforts lead to results,” Chief Cabinet Secretary Yukio Edano told a news conference.

TOKYO (Reuters) – Executives of Japan’s ruling Democratic Party proposed suspending the party membership of powerbroker Ichiro Ozawa over a funding scandal on Monday, a move that risks deepening divisions in the party.

Ozawa’s scandal-tainted image has helped slice Prime Minister Naoto Kan’s support rate, but punishing him risks angering his backers in the party at a time when their votes in parliament are crucial to pass bills to implement the 92.4 trillion yen ($1 trillion) budget for the fiscal year from April 1.

The premier is trying to get budget-related bills through a divided parliament, either by wooing enough opposition votes in the upper house for a simple majority or getting help from a tiny former coalition partner in the lower house to build the two-thirds majority needed to override the upper chamber.

Officials in the ruling Democratic Party of Japan (DPJ) proposed suspending Ozawa’s membership until his trial in the funding scandal ends, the party said in a statement.

Jiji news agency said three executives had opposed the punishment. Other party members have also protested.

But it was unclear if the move, which is still subject to approval by another group of party officials, would prompt Ozawa’s supporters to go so far as to vote against budget-related bills in parliament.

“Poll show that voters want the DPJ to take some form of action against Ozawa so if the party can win public support with this punishment, that could discourage Ozawa’s allies from revolting,” said Noritada Matsuda, associate professor at University of Kitakyushu.

By Chisa Fujioka

YOKOSUKA, Japan (Reuters Life!) – Growing up in Japan, Yusuke Tsuge never imagined he’d run around in military fatigues or carry a rifle in a country that has not engaged in armed conflict since its defeat in World War Two.

But on a recent sunny day, Tsuge, a magazine editor, was among 42 Japanese taking part in training to join the military reserve force, in which ordinary people with day jobs stand by to help out the military when it is mobilized to defend the country.

Under a gun-shy, post-war defense policy, Japan has never deployed its reserve force, formed in 1954 and now with a headcount of 39,500.

Even the military, officially called the Self-Defence Forces (SDF), is untested in battle. Japan’s pacifist constitution bans the maintenance of a military, although it has been stretched to allow armed forces for self-defense.

After saluting the national flag following an early morning formation drill, Tsuge and the other trainees, clad in uniforms and green helmets, slung rifles over their shoulders before marching to a field to practice surveillance and capturing enemy soldiers at gunpoint.

As a reservist with no military experience, Tsuge would not take part in front-line defense but could still be called on to guard army posts at home or to transport supplies. He could also be deployed to help the SDF in rescue work for earthquakes, floods and other disasters.

By Chisa Fujioka

YOKOSUKA, Japan (Reuters Life!) – Growing up in Japan, Yusuke Tsuge never imagined he’d run around in military fatigues or carry a rifle in a country that has not engaged in armed conflict since its defeat in World War Two.

But on a recent sunny day, Tsuge, a magazine editor, was among 42 Japanese taking part in training to join the military reserve force, in which ordinary people with day jobs stand by to help out the military when it is mobilized to defend the country.

Under a gun-shy, post-war defense policy, Japan has never deployed its reserve force, formed in 1954 and now with a headcount of 39,500.

Even the military, officially called the Self-Defence Forces (SDF), is untested in battle. Japan’s pacifist constitution bans the maintenance of a military, although it has been stretched to allow armed forces for self-defense.

After saluting the national flag following an early morning formation drill, Tsuge and the other trainees, clad in uniforms and green helmets, slung rifles over their shoulders before marching to a field to practice surveillance and capturing enemy soldiers at gunpoint.

As a reservist with no military experience, Tsuge would not take part in front-line defense but could still be called on to guard army posts at home or to transport supplies. He could also be deployed to help the SDF in rescue work for earthquakes, floods and other disasters.

TOKYO (Reuters) – Candidates backed by Japanese Prime Minister Naoto Kan’s ruling party lost two weekend local elections, in a blow to the premier who is struggling to unite the party and break deadlock in a divided parliament.

Independents won both a gubernatorial and a mayoral election in central Japan on Sunday, seen as a bellwether for a series of nationwide regional elections in April that will be a major test for Kan after nearly a year in office.

A big defeat in April would further weaken his clout in the ruling Democratic Party of Japan (DPJ) and give rival parties more ammunition to stall policies in parliament, where the opposition-controlled upper house can block bills.

Opposition parties have already threatened to block legislation to fund the budget for the year starting on April 1.

But the weekend election results were hardly good news for the main opposition Liberal Democratic Party (LDP) since the victors were both independents and voters appeared dissatisfied with both major parties.

The DPJ can enact the 92.4 trillion yen ($1 trillion) budget on its own with its majority in the lower house but the opposition can use it dominance in the upper chamber to block key laws needed to carry out the spending.

The combative opposition is also clouding the outlook for tax and social welfare reform, for which Kan aims to compile a comprehensive plan by June.

TOKYO (Reuters) – Japanese ruling party powerbroker Ichiro Ozawa was charged on Monday over a funding scandal, adding to Prime Minister Naoto Kan’s woes as he struggles to survive in the face of a divided parliament and sagging support.

Ozawa’s indictment will give fresh ammunition to opposition parties who control parliament’s upper house and are refusing to join multiparty talks on tax reform to curb Japan’s huge debt and opposing the government-sponsored budget for the year from April.

The opposition is instead trying to force Kan either to resign or call a snap election for the powerful lower chamber.

“We want him (Ozawa) to explain in his own words. We want him to testify in parliament,” Nobuteru Ishihara, secretary-general of the main opposition Liberal Democratic Party (LDP), told reporters.

Ozawa, a seasoned political strategist who once headed the ruling Democratic Party of Japan (DPJ), faced mandatory indictment over suspected misreporting by his political funds body after a lay judicial panel decided last year that he must be charged.

Ozawa, 68, reiterated that he was innocent and told reporters he had no intention of leaving the party or parliament.

“I have done nothing to be ashamed of, and will make clear my innocence in court,” Ozawa said. “In order to realize policies that put the people’s livelihood first, I want to make efforts sincerely as a Democratic Party lawmaker.”

TOKYO (Reuters) – Japan’s new economics minister warned on Friday that the country faced a fiscal dead end, signalling a revamped cabinet was serious about tax reforms to rein in the country’s massive public debt.

But with opposition parties able to block bills in the upper house of parliament and Kan’s Democratic Party of Japan (DPJ) divided, scepticism over policy success runs deep.

Prime Minister Naoto Kan drafted Kaoru Yosano, an advocate of raising the 5 percent sales tax to fund bulging social welfare costs, in a cabinet reshuffle.

“Japan’s fiscal policy will hit a dead end if it is left as it is,” Yosano told reporters.

Yosano’s appointment could ease some concerns in the bond market by suggesting future progress on fiscal and tax reform, said Akitsugu Bandou, a senior economist at Okasan Securities.

“But the government will continue to face a severe situation because of political deadlock, and the cabinet reshuffle is not necessarily going to change the situation that the DPJ lacks political power,” Bandou said.

Kan appointed former administrative reform minister Yukio Edano as his new chief cabinet secretary, bowing to opposition demands to ditch his influential second-in-command in an effort to smooth the way to pass bills in a divided parliament.