Koizumi, 66, said he would not stand for re-election to parliament from his seat in Yokosuka, a city at the mouth of Tokyo Bay, whenever elections are next called. He named his second-eldest son, Shinjiro, to run in his constituency.

Following the confirmation of Taro Aso as the new premier on

 

Wednesday, snap elections are expected within the next few months.

Koizumi has always been a man full of surprises, and he has a strong will. While premier, he aggressively promoted structural reforms, including privatization of government-held assets. He unexpectedly made two trips to North Korea - in September 2002 and in May 2004 - for talks with reclusive leader Kim Jong-il and secured the repatriation of five Japanese abductees and their families. He remained a staunch supporter of the United States and stubbornly made annual visits to the war-related controversial Yasukuni shrine in Tokyo.

Koizumi may have recognized that as he is no longer a leader, that he is not in step with the times. He opposed Aso's bid to become prime minister by offering support in the ruling Liberal Democratic Party (LDP) to rival Yuriko Koike, a former high-profile TV anchorwoman who was seeking to become Japan's first female leader.

The Aso administration wants to adopt a Keynesian-style fiscal expansionary policy with increased public investment and tax reductions in preparation for the snap election expected as early as late October.

This is a big retreat from Koizumi’s aggressive restructuring policies during his five years and five months at the helm, the third-longest term for a Japanese prime minister in the post-World War II period.

"Koizumi was a prominent politician in the post-war period by doing what other politicians could not do,” said Yoshiaki Kobayashi, professor of political science at Keio University. “The rest of the world could easily understand what he was aiming for. He may want to retire by looking at the lineup of the Aso’s cabinet, which denies his reformist policy.”

His retirement announcement came as the nuclear-powered US aircraft carrier George Washington arrived at its new home port in Yokosuka, Koizumi’s constituency.

Koizumi has always affirmed the importance of the now strained Japan-US alliance. Much of the public, backed by the nation's pacifist sentiment, has hesitated in becoming fully involved in the US's military operations in the international fight against terrorism.

The government failed once last year to have the Diet (parliament) extend a law for Japan's refueling mission for US-led coalition vessels in the Indian Ocean, a symbol of Tokyo's commitment to the two nations' bilateral military alliance. This reversal was a consequence of the LDP's devastating defeat in the July, 2007, Upper House elections, which enabled the opposition camp to block the passage of key bills.

"That would be just like him to do that gracefully," Tokyo governor Shintaro Ishihara said of Koizumi's retirement announcement. "With the Liberal Democratic Party having no shortage of qualified personnel, it's better to keep the party's metabolism running." The city governnor's family is related to Koizumi by marriage.

The loss of Koizumi's popularity will be a major setback for the LDP in the polls. As it is, Aso's popular support remains at about 50% in various opinion polls, below even the rate of his predecessor Yasuo Fukuda at the time of his administration's inauguration last year.

Economically, Japanese stocks and government bonds, and even the yen, may be sold further as there is some risk the LDP will lose power without the reformist Koizumi. This would be a major power shift after more than 50 years of de facto one-party rule and would raise concern over the nation’s ballooning budget deficit.

The world’s second-largest economy is being buffeted amid the deteriorating global economic conditions, a domestic slowdown and ailing social welfare and medical systems.

Unlike in Koizumi’s time, Japan's diplomatic ties with its neighbors may not suffer during Aso's term, as some critics say, because Aso has said he won’t visit the Yasukuni shrine.

In a sign of growing public frustration with the parliamentary gridlock, people are becoming increasingly inward-looking, suggesting Japan won't take a more assertive global role in the near future - certainly not until the next polls.

Kosuke Takahashi, a former staff writer at the Asahi Shimbun, is a freelance correspondent based in Tokyo. He can be contacted at letters@kosuke.net.

(Copyright 2008 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)