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Is Japan minister's resignation final straw for economy?

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Toru Hanai/Reuters

(Read caption) Japanese Finance Minister Shoichi Nakagawa, seen here leaving a press conference in Tokyo Feb. 17, resigned after being forced to deny he was drunk at a G-7 conference.

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Thought the US had it tough? Try Japan.

In the last two days, it has reported:

•A quarterly plunge in its gross domestic product that, if continued through 2009, would mean a breathtaking 12.7 percent shrinkage of its economy.

•A fall in its stock market to lows not seen since Oct. 28, when some US and other financial institutions tottered on the edge of collapse.

•The resignation Tuesday of its finance secretary because he appeared drunk at an international meeting of the G-7 nations. (He blamed a combination of medication and jet lag.)

Government wobbles with economy

The world's No. 2 economy doesn't need more bad news. Its deep recession has already made the government of Prime Minister Taro Aso so unpopular that some commentators doubt it will survive the latest flap. Without strong leadership, the country continues to flounder.

Japan's central bank provided some support Tuesday, announcing that it would spend up to $11.2 billion to buy shares of its commercial banks to stabilize the system. Secretary of State Hillary Clinton on tour in Japan announced that Mr. Aso would be the first foreign leader to visit President Obama.

Stimulus stuck

A bigger boost would come if a log-jammed parliament could push through a $50 billion-plus stimulus package.

A weak Japan weakens the world economy. The bottom line for America is that without a reasonably healthy Japan (and China) to keep buying its debt, the US may not be able to finance its own stimulus plans, as an op-ed in the Wall Street Journal points out.

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