Embattled Japan PM faces ethics committee, with popularity and budget on the line

By Sakura Murakami

TOKYO (Reuters) -Fumio Kishida on Thursday became the first sitting Japanese prime minister to appear before a parliamentary ethics committee, as he sought to draw a line under a funding scandal that has hurt his popularity and may delay next year's budget.

Kishida's attendance followed weeks of wrangling between the opposition and the ruling Liberal Democratic Party (LDP) over the technicalities of how to hold the hearings, which will look into how some LDP factions failed to report hundreds of millions of yen from fundraising parties.

The opposition had demanded a full public hearing that would include the five key members of the biggest faction caught in the scandal. The LDP had argued for a closed session.

"As the LDP leader, I apologise from my heart that this fundraising issue has raised suspicion and caused distrust in politics among the people," Kishida said in opening remarks before being questioned.

Kishida is not directly implicated in the scandal but said the party could consider penalising those involved as it works on prevention measures.

Support for Kishida and his ruling LDP has dipped to its lowest point since Kishida took the top post in 2021, with approval for the premier hanging at 25% and support for the LDP at about 30%, according to a poll by NHK in early February.

The negotiations over the hearing have also threatened to delay the fiscal 2024 budget, which Kishida hopes to pass in the lower house by March 2 to secure the 30 days necessary for a budget to be adopted automatically before the fiscal year starts in April.

"We must not have a situation where the budget is not adopted according to plan," Kishida said at the committee hearing.

A failure to deliver the budget smoothly would deal another blow to Kishida as he tries to drum up support ahead of an LDP leadership contest in September, Tobias Harris, an expert on Japanese politics at the German Marshall Fund, said in a note.

"If Kishida is to survive to fight for another term in September, he has to make a convincing display of cleaning house, put the scandal to rest, and hope that good economic news and some diplomatic achievements – a state visit to Washington in April, for example – allow him to make the case for his leadership again," he said.

(Reporting by Sakura Murakami. Editing by Gerry Doyle)