Market News

 July 05, 2011
Japan can't rule out nuclear power, official says

 Japan should reduce its reliance on atomic power but deep public debate is needed over whether to rule it out entirely, a potential candidate to replace Prime Minister Naoto Kan said on Tuesday.

A nuclear crisis at Tokyo Electric Power Co.'s tsunami-crippled Fukushima plant is pushing Japan to reconsider the role of nuclear power in the quake-prone country, and Mr. Kan has begun a blank-slate review of a plan to boost atomic energy's share to more than 50 per cent of electricity supply by 2030.

"I think we must escape from our reliance on nuclear power," Sumio Mabuchi, a former transport minister nicknamed the "Terminator" for his body-building hobby, told Reuters in an interview. "But we shouldn't just decide emotionally to abandon it because of a dangerous accident.

"We need to consider carefully whether our resource-poor country should limit our energy options," added the 50-year-old Mr. Mabuchi, who served as an aide to Mr. Kan on the crisis until a personnel reshuffle last month.

"If we decide to abandon nuclear power, there will be inconveniences and costs and the question is whether the public is prepared for that."

Mr. Kan, in office just over a year, survived a no-confidence vote last month by promising to step down, but has declined to say when he will keep that pledge, a stance that is worsening the deadlock in Japan's divided parliament.

Mr. Kan, under fire for his handling of the nuclear crisis, took another blow on Tuesday when his reconstruction minister resigned barely a week in the job.

Mr. Mabuchi also criticized a government push to get local communities to agree to restart reactors halted for regular inspections to avert a possible summer power crunch.

He said Japan first needed to outline new, though still provisional, safety standards to gain international and public understanding after trust was damaged by sloppy information disclosure following the massive March 11 earthquake and tsunami that devastated the Fukushima plant.

"To restart reactors that are halted due to regular inspections in the current situation would be extremely problematic," he said, adding any gaps in electricity supply should be met by using fossil fuel.

Mr. Mabuchi also urged the Bank of Japan to adopt a policy of quantitative easing and underwrite bonds to be issued to pay for rebuilding tsunami-hit northeast Japan -- the nation's biggest rebuilding project since right after the Second World War.

Japan is already burdened with public debt worth twice the size of its $5-trillion (U.S.) economy, but the central bank has rejected the notion of directly buying such reconstruction bonds for fear of opening the door to unlimited spending and pushing up bond yields.

"There are people who worry about hyper inflation [if such steps are taken], but is it really all right to keep stagnating like this?" Mr. Mabuchi said.

Mr. Mabuchi also said a government plan to double the sales tax to 10 per cent by mid-decade to fund rising social welfare costs and help curb massive public debt could be revisited when a new leader replaces Mr. Kan, even though the plan was already watered down. "There is still dissatisfaction in the party," he said.