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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Weekend Edition Australia China India Indonesia Japan Malaysia Philippines Thailand Vietnam Japan's Ozawa rejects PM's plea on ethics panel Reuters - 1 hour 34 minutes ago Send IM Story Print By Kiyoshi Takenaka TOKYO - Scandal-plagued Japanese powerbroker Ichiro Ozawa rejected on Monday a call from Prime Minister Naoto Kan to appear before a parliamentary ethics panel, threatening to widen a rift in the fractious ruling party. Kan, who took office in June as Japan's fifth prime minister in three years, has been trying to look decisive to bolster his sagging support rates and avoid becoming the latest of the nation's "revolving door" leaders. Kan also hopes that taking a tough line on Ozawa, who has denied wrongdoing but faces charges stemming from suspected misreporting by his political funds body, will help win opposition backing to pass laws in a divided parliament. But the party strife is exacerbating financial market concern about a lack of leadership as Japan struggles with deep-rooted policy challenges such as social welfare and pension reform and how to engineer growth in a fast-ageing society. "Markets are watching out for the long-term implications of the feud closely. Prolonging the present situation without any clear outcome is the worst for the market," said Yumi Nishimura, a senior market analyst at Daiwa Securities Capital Markets. "The rivalry has already been dragging for some time, and if it continues ... it will likely have strong negative implications for the government's policies next year," Nishimura said. MUTUAL DILEMMA Kan, 64, met Ozawa, a 68-year-old veteran with a reputation for shaking things up, for about 90 minutes. "I asked him to voluntarily appear before a parliamentary ethics panel. But Mr Ozawa said there is no grounds for him to appear," Kan told reporters after the meeting. Kan dodged a question about whether he would try to expel Ozawa from the party if he stuck to his stance. Ruling party executives will meet later on Monday to discuss what to do next. A weekend survey by the Mainichi newspaper showed support for Kan's government had slipped 2 points to 24 percent, in line with other recent surveys. Support for Kan's Democratic Party of Japan , suggesting the once-dominant LDP has failed to capitalise on its rival's woes. Analysts said the bickering could drag on into the new year. Kan faces a dilemma in how to handle Ozawa, who stepped down as DPJ leader in May 2009 but was widely credited with helping to engineer the election victory that swept the party to power that year for the first time. If Ozawa keeps refusing to appear before the ethics panel, even if formally summoned, Kan will have to decide whether to try to expel him, a move that risks splitting the party. Ozawa himself is also in a bind. Prosecutors are obliged to charge him over the funding scandal, probably early in the new year, after a judicial panel of ordinary citizens ruled that he should be indicted. Many Ozawa backers might, therefore, be wary of following Ozawa out of the party, given his waning influence and opposition parties' likely aversion to tying up with the unpopular lawmaker. 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