Japan's Nikkei share average dropped to more than a one-week low on Monday morning as investors repsonded to opinion polls showing falling support for Prime Minister Shinzo Abe amid a cronyism scandal that has gripped the country.
He also pointed out that the Moritomo-related documents released March 12 by the Finance Ministry contained no mention that either he or his wife was involved in the negotiations.
The scandal stems from the 2016 sale of state land to school operator Moritomo Gakuen in Osaka at one-seventh of the appraised value with the alleged involvement of Akie Abe, who has said both she and her husband supported the school's ultra-nationalistic philosophy of education.
But Jiro Yamaguchi, a politics professor at Hosei University in Tokyo, said the public was "not at all convinced" by this explanation.
The government has insisted that the hefty discount was necessary to decontaminate heavily-polluted land. "Without any political pressure, this could never happen, and voters are angry about it", said Yamaguchi.
Polls conducted by the Asahi Shimbun, Mainichi Shimbun, Kyodo News and Nippon News Network all reported falls of around 10 points in the Cabinet's approval rate from last month that left it polling between 30.3 percent and 38.7 percent. "We take seriously the fact that this is a situation that has shaken public confidence in the entire administration". Abe took office in December 2012.
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Another survey suggested that for the first time since before a general election in October, more people disapproved of the cabinet's performance than approved.
"If any further trouble emerges, that will be different, but as of now it's very hard to connect Abe himself to the mishandling of documents", said Watanabe.
The scandal is harming Abe's hopes of winning re-election as head of his Liberal Democratic Party (LDP) in September, which would make him Japan's longest-serving prime minister.
He was responding to calls by the opposition that it was Mr Abe's pledge to resign, made in February past year, if either he or his wife was found to be directly involved in the sweetheart deal that sparked the entire chain of events.
If Abe is to be replaced, it will require an internal power struggle within the LDP, and the opposition camp will play no part, Matsumoto said. Opposition lawmakers at the latest budget committee meeting grilled the prime minister over the connection between his earlier testimony and the document doctoring scandal.
Masayuki Kubota, chief strategist at Rakuten Securities, noted there were "growing voices" calling for Abe and Aso to be held responsible.