Political funds used at sex-themed club; potential new headache for Abe

Japan was roiled by its third political scandal in a week on Thursday after the new trade minister - whose predecessor resigned in disgrace over improper spending - admitted that his supporters had spent office cash at a sex bar.

Yoichi Miyazawa, 64, head of the Ministry of Economy, Trade and Industry, said he learned from a news report about the 18,230 yen ($170) that the support group spent at the sadomasochism-themed bar in his political district of Hiroshima. The incident is a potential new headache for Prime Minister Shinzo Abe.

But Miyazawa, a Harvard graduate, immediately distanced himself from the brewing scandal, saying he wasn't present at the club.

"It is true such expenses were made," Miyazawa told reporters. "But I myself did not go there at all. That's true as well."

Kyodo News said the support group Miyazawa-Kai made the payment on Sept 6, 2010, labeled "entertainment expense", according to a political finances report.

It was not immediately clear if Miyazawa - a nephew of late prime minister Kiichi Miyazawa and a cousin of Foreign Minister Fumio Kishida - would step down.

Gender reforms

Miyazawa, a veteran politician, was picked to head the Ministry of Economy, Trade and Industry on Tuesday after the sudden resignation of his predecessor, Yuko Obuchi.

Obuchi, a 40-year-old seen as a contender to be Japan's first female premier, quit less than two months after her appointment after allegations that her support groups misused political funds.

Justice Minister Midori Matsushima resigned the same day over unrelated allegations of election-law irregularities.

The double resignations were a blow to Abe's proclaimed gender reforms, while commentators said his administration could be in trouble if their replacements did not have solid reputations.

The industry ministry oversees the energy sector and is the face for Tokyo's attempts to convince a skeptical public on the safety of restarting stalled nuclear power plants more than three years after the Fukushima reactor crisis.

All of Japan's 48 operational nuclear reactors are currently switched off. But Tokyo has been pushing to return to a source that once supplied more than one-quarter of Japan's energy, as heavy energy import bills weigh on the country's trade balance.

Meanwhile, Abe's bid to kick start Japan's lagging economy has stumbled after his government raised sales taxes in April to help pay down a massive national debt.

Abe's first 2006-07 term as prime minister was plagued by a string of resignations that eroded his support.

It ended when he quit abruptly in the face of a parliamentary deadlock and ill-health - although experts are not predicting a replay of that scenario.

"We were quite taken by surprise" by the report, an official in Miyazawa-Kai's Tokyo office told Reuters. "But on the date mentioned in the report, we have Miyazawa's schedule and he did not go" to the club.

AFP - Reuters