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Factbox: Five facts about Japan PM Naoto Kan

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Sun Jul 11, 2010 5:31am EDT

(Reuters) - Japanese Prime Minister Naoto Kan has made fiscal reform, including a possible sales tax hike, central to his campaign for an election on Sunday in a gamble that voters will swallow a higher tax burden to fund soaring social security costs.

But Kan's Democratic Party looks increasingly likely to suffer a sharp setback in the upper house election, putting his job at risk and complicating efforts to curb the country's mountain of debt.

Following are five facts about Kan.

-- Just a month ago, then Finance Minister Kan took over from his unpopular predecessor Yukio Hatoyama and became Japan's fifth prime minister in three years at a time when the country was struggling to rein in soaring debt, engineer sustainable growth in an aging society and manage ties with security ally the United States and a rising China.

-- Having seen Greece's debt problems turn into a European crisis, Kan became one of Japan's most vocal advocates for the need to come up with a credible long-term fiscal reform plan. Kan is determined to avoid a debt crisis in Japan, often citing the Greek problems and the market's concern about Japan's huge debt, which at near 200 percent of GDP is the highest among major economies.

-- Kan is known both for sharp debating skills and a short temper, but he has recently been somewhat on the defensive after his call to debate possibly doubling the 5 percent sales tax has put off some voters ahead of the election. He has apologized for failing to fully clarify his stance on the sales tax, saying voters got the wrong impression that the tax would be raised immediately when he has said such a hike would take at least two to three years.

-- A vocal critic of the Bank of Japan when it was reluctant to ease monetary policy, Kan toned down his criticism after the central bank took several steps, but might turn up the heat quickly if the economy takes a turn for the worse. Kan is widely regarded by currency traders as favoring a weaker yen, and his recent comments have done nothing to change that impression.

-- The 63-year-old veteran lawmaker, who founded the Democratic Party with Hatoyama more than a decade ago, shot to fame as health minister in the 1990s, when he battled bureaucrats and spearheaded a campaign to unveil the scandal over HIV-tainted blood products. Kan, the son of a businessman, with a passion for mahjong and an everyman image, began his career as a grassroots activist, campaigning for a prominent feminist lawmaker before seeking a seat in parliament. He lost three times before winning a seat for a small, leftist party.

(Reporting by Yoko Nishikawa; Editing by Alex Richardson)

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