Mori sends mixed signals over departure

Mori plans to visit Hawaii after meeting with President Bush in Washington next week

In this story: Confusion within ruling party Japan malaise to dominate U.S. talks RELATED STORIES

TOKYO, Japan -- Confusion over Japanese Prime Minister Yoshiro Mori's intentions have deepened after he said new economic steps wouldn't necessarily delay his resignation.

The unpopular premier told partners in the three-way ruling coalition there was no need to link the enactment of steps to bolster sagging stocks with the timing of a ruling party election to replace him as leader.

Mori has already agreed to bring forward from September an election for the presidency of his dominant Liberal Democratic Party (LDP), setting the stage for him to step down ahead of Upper House elections in July.

The LDP presidency typically ensures the premiership since the party is the biggest in the three-way ruling camp.

But some LDP elders have argued that the party poll should be delayed to allow time for the enactment of emergency steps aimed at breathing life back into the economy.

Mori told the leaders of the other two parties in the ruling camp, however, that the party election and the stock-boosting steps were separate issues, Jiji news agency said.

"They should not be linked," he was quoted as saying.

Confusion within ruling party

Later he said there was no rule mandating that a prime minister who has announced his resignation has to step down immediately.

"The prime minister has the responsibility to stay in his job until his successor is chosen," Mori told a parliamentary committee. "If he has things pending in parliament and on the diplomatic agenda, of course he must take care of them."

Mori's popularity ratings have been pummeled into single digits by a string of verbal gaffes and scandals since he took office about a year ago.

Wily LDP elder Hiromu Nonaka -- one of the favourites to succeed Mori -- told reporters that previous comments he had made hinting at a later poll had been misconstrued.

"I did not say having the poll in June was a good idea," the Mainichi Shimbun newspaper quoted him as saying. "Mainly, we wanted to show that we are zealous about the economic steps before the prime minister visits the United States."

But Makoto Koga, secretary-general of the LDP, appeared to contradict this when he told reporters on Friday that priority was being given to parliament and diplomacy.

"We are currently not thinking about the timing of the party election at all," he said. "We must firmly carry out budget deliberations and upcoming summit meetings, and coalition support for this is very important."

Japan malaise to dominate U.S. talks

Japan's economic malaise is set to dominate talks with U.S. President George W. Bush in Washington on Monday.

Secretary of State Colin Powell told Congress on Thursday that a further deterioration of the Japanese economy could pose a security threat to the United States, a view he said was shared by senior members of the administration.

Mori, meanwhile, will ask Bush to take all possible measures to ensure the slowing U.S. economy achieves a soft landing, Jiji said, also quoting him as saying he planned to discuss the reasons behind the slump in Tokyo share prices and what steps Japan is taking to deal with this.

The talks will also aim to soothe Japan-U.S. relations, which have been strained by last month's sinking of a Japanese training trawler after it was struck by a U.S. nuclear submarine. Nine Japanese were killed in the incident.

The two are likely to issue a joint statement following their meeting, Foreign Minister Yohei Kono said.

Observers on both sides of the Pacific have expressed skepticism over how useful the meeting will be in light of Mori's tenuous hold on the top job.

Although potential successors to Mori have so far been coy about their desire for the job, analysts say a behind-the-scenes jostle to replace him has already begun.

The LDP's ruling partners, the New Komeito Party and the New Conservatives, favor LDP's power broker Hiromu Nonaka, while younger LDP lawmakers favor reform-minded Junichiro Koizumi, nominal head of Mori's own faction.

Reuters contributed to this report.

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