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The debate in the Japanese Diet remained contentious this quarter as opposition parties challenged the Fukuda government on several legislative issues including the gasoline tax, a new health insurance program for the elderly, and host nation support for U.S. forces. Fukuda’s approval rating fell suddenly due to public dissatisfaction with his domestic policy agenda but later rebounded enough to quell rumors of a Cabinet reshuffle prior to the Hokkaido G8 Summit in July. The arrest in early April of a U.S. serviceman charged with murdering a taxi driver in Yokosuka brought negative publicity for U.S. forces.

Japanese anxieties also continued to mount as the U.S. prepared to lift terrorism-related sanctions on North Korea as part of the Six-Party Talks, despite earlier pledges that this would not be done without progress on the abductee issue. President Bush did announce his intention to lift those sanctions on June 26, but his strong reaffirmation of support for Japan on the abductee issue helped to assuage some of the concerns in Tokyo. It also helped that Secretary of State Condoleezza Rice stressed during the G8 foreign ministers meeting in Kyoto that the U.S. actions would be reversed if North Korea’s claims could not be verified; a message of reassurance Bush would likely echo and broaden during his visit to Japan in July. All of this took place as the Japanese public paid close attention to the U.S. presidential race and as the candidates took their debate into the pages of Japanese newspapers. Speculation also persisted about possible dissolution of the Diet and new elections in Japan sometime in the next year.