Support drops but Mori stays on

Gaffe-prone Mori's popularity hits a low

TOKYO, Japan -- Beleaguered Japanese Prime Minister Yoshiro Mori has rejected calls to resign despite his support hitting the lowest rate ever.

A weekend poll showed only nine percent of respondents supported Mori, the second-lowest support rate for any prime minister since the newspaper began polls in 1946.

Mori, facing the biggest crisis of his 10-month rule, on Monday said he wanted to stay on to push through the budget and drive reforms in education and information technology.

Mori's troubles come amid growing concern over Japan's faltering economy and tense ties with the United States after a U.S. submarine hit and sank a Japanese training trawler off Hawaii, leaving nine missing.

Speculation is mounting that leaders in Mori's three-way ruling coalition will force him to step down as early as next month to improve their chances in a July election.

"What I must do above all is achieve an economic recovery. And for that, I want by all means to enact the budget (for the fiscal year from April 1)," Mori told a panel in parliament.

Calls to resign

Mori's words followed calls by senior Japanese executives for him to resign, according to Japanese media.

"He must now think how to retreat with honor," the Kyodo news agency quoted a senior executive of the New Komeito Party -- the number two partner in the ruling coalition -- as saying.

Support from other parties, such as the New Komeito Party, is vital because Mori's Liberal Democratic Party (LDP) lacks a majority in parliament's powerful Lower House.

Along with getting battered for his links with other scandals, Mori has come under fire recently for continuing to play golf after learning about the U.S. submarine crash.

But Mori defended his decision on Monday, saying it was best to stay in one spot to get more information.

A Mori supporter, LDP policy chief Shizuka Kamei, also defended the leader's decision, adding Japan would suffer if it kept changing prime ministers at such short notice.

"I would say it is not good to have 10 prime ministers in 10 years," he said, referring to the frequent changes in Japan's top leader over the past decade.

Investors in Japan's financial markets were cheered last week by chances that Mori's departure would clear the way for painful but vital economic reforms.

But on Monday share prices sagged and the yen came under pressure, as market players fretted that whoever succeeded Mori would also lack the will or authority to push through reforms.

Tokyo's benchmark Nikkei average hit a 28-month closing low, edging down 0.42 percent to 13,119.59. It earlier slipped below the psychologically key 13,000 level.

Traders said market participants would keep their eyes glued to developments.

Reuters contributed to this report.

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