TOKYO (Reuters) - Japanese Prime Minister Naoto Kan hinted on Thursday that he would step down after handling issues related to the March 11 earthquake and tsunami and the subsequent nuclear crisis.
The embattled prime minister is facing a vote of no confidence in parliament from opposition parties on Thursday. The vote is expected at around 3:00 p.m. (2 a.m. ET)
Below are analyst comments on Kan's move.
YASUO YAMAMOTO, SENIOR ECONOMIST, MIZUHO RESEARCH INSTITUTE
"Among possible scenarios the best one would be Prime Minister Kan voluntarily resigning and the DPJ forming a coalition with the LDP to stabilize politics. Unstable politics would weigh on stock prices and delay reconstruction after the disaster.
"From both Japanese and foreign investors' point of view, now is not the time for political turmoil. Japan has various issues it needs to address swiftly -- not only reconstruction but also tax and social security reform, TPP and an energy policy which requires political initiative."
KOICHI ONO, SENIOR FIXED INCOME STRATEGIST, DAIWA SECURITIES CAPITAL MARKETS
"Given the current makeup of the parliament, cooperation between the ruling and opposition parties is necessary. As opposition parties have been indicating that they cannot do that with Kan at the top, this opens the way for more political cooperation, though it's not clear how soon that will happen.
"It was good that Kan said he would quit after a while as that enables a smooth transition of power. If he stepped down immediately that would lead to more uncertainty.
"For the bond market, one big question is whether Kan's fiscal reform agenda will be delayed but the answer to that is not clear yet. So there may not be much reaction in the market."
(Reporting by Hideyuki Sano and Kaori Kaneko; Editing by Nathan Layne)