How Scandal Finally Outran the Reformer

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Despite his downfall, Hosokawa will be remembered for his role in prying Japanese politics free from the hammerlock of the L.D.P. But he leaves behind ^ an awkward governing coalition, which includes highly conservative former L.D.P. barons widely viewed as corrupt, as well as pacifist social democrats and disparate smaller parties. The power brokers who remain are struggling to hang together in the face of attempts by political rank and file to find a sturdier combination. At week's end the leading candidates to become Prime Minister were Tsutomu Hata, head of the coalition's second biggest party, and former Foreign Minister Michio Watanabe, with former Prime Minister Toshiki Kaifu as the dark horse.

Whoever follows Hosokawa will preside over a weak government in which politicians will be concerned with building coalitions while avoiding scandals of their own as they look toward the next general election. "That means the bureaucracy will be left 'home alone' to run the country," says a U.S. official. But major initiatives, like opening up Japanese markets to avoid a fight with Washington, will require real political risk-taking, which is now much less likely. That's bad for Bill Clinton, who has staked a lot of his hopes for easing trade tensions on his ability to get along with fellow reformer Hosokawa. "This makes our life on the trade side very difficult," says the U.S. official.

Of course, while Hosokawa is now down, he is not necessarily out. His grandfather Fumimaro Konoe was Prime Minister three times, resigning twice over a misjudgment. Asked if he would like to return to the top job, Hosokawa responded, "I have no such thoughts." But that's just what he said the week before he became Prime Minister.