The Japanese stock market is modestly lower on Tuesday, tracking the mixed lead overnight from Wall Street and as the yen strengthened after Japanese Prime Minister Shinzo Abe came under renewed scrutiny in a suspected cronyism scandal.
Abe, now in his sixth year in office, has denied that he or his wife did favors for the school operator, Moritomo Gakuen, and has said he would resign if evidence was found that they had.
The Moritomo Gakuen scandal, which first surfaced in February a year ago and pushed down Abe's support ratings, has drawn fresh attention since a major Japanese daily reported on March 2 that the ministry documents had been doctored to remove descriptions stating the discounted land sale price was "exceptional".
Suspicion of a cover-up could slash Abe's ratings and dash his hopes for a third term as leader of his Liberal Democratic Party (LDP).
Until now... because as the Japanese press reported over the weekend, the Moritomo scandal involving PM Abe's connections with the operators of the right-leaning school implicated in fraud are again roiling markets in Japan.
The changes include the removal of a reference to a visit to the school by Abe's wife and to ties that Abe and Finance Minister Taro Aso had to a conservative lobby group, Nippon Kaigi - both well-known facts.More news: Arsenal's Win Over Watford Is Important, Says Arsene Wenger
The doubts have also sparked calls for Aso to quit, but the finance minister said on Friday that he will not step down. "What became clear is that they debased democracy", by lying to parliament, said opposition lawmaker Renho, who uses one name.
"What is important now is to make everything clear", Suga said at a news conference.
The risk now for Aso and Abe, experts said, is that the suspected cover-up does more damage than the land sale itself.
"It is an urgent task to find out the goal (of the alterations) and who authorized them, and tell the public what really happened", Sakakibara said. He said Aso should resign and parliament hold hearings on the matter.
Japan's Prime Minister Shinzo Abe (L) and his wife Akie at Haneda Airport in Tokyo, Japan February 28, 2017.
"At the very least, it seems that Mr Aso's chances of surviving as finance minister are diminishing rapidly", wrote Mr Tobias Harris, vice-president of consultancy Teneo Intelligence, in an e-mail.More news: Turkey will deliver Afrin to its true owners, says Erdoğan
Mr Abe acknowledged the new revelations "could undermine trust in the entire government" and added, "I strongly feel responsibility as the head of administration".
Last week, tax agency chief Nobuhisa Sagawa, who formerly oversaw the Finance Ministry bureau dealing with the land sale, resigned from his current post.
Abe, 63, swept back to power in December 2012 promising to revive the economy and bolster Japan's defense.
His ruling bloc won a two-thirds "super majority" in a October lower house poll, helped by opposition disarray.
A 9-11 March survey by the Yomiuri newspaper showed support for Abe's cabinet has now fallen to 48 percent, down six points from a month earlier.More news: 17 people including ten policemen killed in Takhar, Kabul