Domestic policy Within Japan, Koizumi pushed for new ways to revitalise the moribund economy, aiming to act against bad debts with commercial banks, privatize the postal savings system, and reorganize the factional structure of the LDP. He spoke of the need for a period of painful restructuring in order to improve the future. To design policy initiatives in 2001 he used the new Council on Economic and Fiscal Policy (Keizai Zaisei Seisaku Tanto Daijin) or CEFP. It issued an annual planning document,
"Basic Policies for Economic and Fiscal Management and Reform". It planned a major reorganization of the central government, and shaped economic policy in cooperation with key cabinet members. To meet the challenge of economic stagnation CEFP took an integrated approach, a worldwide economic view, and, promoted greater transparency; its philosophy was neoliberal. In the fall of 2002, Koizumi appointed Keio University economist and frequent television commentator
Heizō Takenaka as Minister of State for Financial Services and head of the
Financial Services Agency (FSA) to fix the country's banking crisis. Bad debts of banks were dramatically cut with the NPL ratio of major banks approaching half the level of 2001. The Japanese economy went through a slow but steady recovery, and the stock market dramatically rebounded. The GDP growth for 2004 was one of the highest among
G7 nations, according to the
International Monetary Fund and
Organisation for Economic Co-operation and Development. Takenaka was appointed as a Postal Reform Minister in 2004 for the privatization of
Japan Post, operator of the country's Postal Savings system. Koizumi moved the LDP away from its traditional rural agrarian base toward a more urban,
neoliberal core, as Japan's population grew in major cities and declined in less populated areas, although under current purely geographical districting, rural votes in Japan are still many times more powerful than urban ones. In addition to the privatization of Japan Post (which many rural residents fear will reduce their access to basic services such as banking), Koizumi also slowed down the LDP's heavy subsidies for infrastructure and industrial development in rural areas. These tensions made Koizumi a controversial but popular figure within his own party and among the Japanese electorate.
Foreign policy meet at the White House on 25 September 2001. Although Koizumi's foreign policy was focused on closer relations with the United States and UN-centered diplomacy, which were adopted by all of his predecessors, he went further, supporting the US policies in the
war on terrorism. He decided to deploy the
Japan Self-Defense Forces to Iraq, which was the first Japanese military mission in an active foreign war zone since the end of
World War II. Many Japanese commentators observed that favorable US-Japan relations were based on Koizumi's personal friendship with US President
George W. Bush. White House officials described the first meeting between Koizumi and Bush at
Camp David as "incredibly warm", with the two men playing catch with a baseball. Since leaving office, he has defended his decision to send Japanese troops to Iraq. Koizumi also took more assertive attitudes than his predecessors on the issues of
North Korean abductions and nuclear development.
Self-Defense Forces policy Although Koizumi did not initially campaign on the issue of defense reform,
Visits to Yasukuni Shrine Koizumi has often been noted for his controversial visits to the
Yasukuni Shrine, starting on 13 August 2001. He visited the shrine six times as prime minister. Because the shrine honors Japan's war dead, which also include many convicted
Japanese war criminals and 14 executed Class A
war criminals, these visits drew strong condemnation and protests from both Japan's neighbours, mainly China and South Korea, and many Japanese citizens. China and South Korea's people hold bitter memories of Japanese invasion and occupation during the first half of the 20th century. China and South Korea refused to have their representatives meet Koizumi in Japan and their countries. There were no mutual visits between Chinese and Japanese leaders from October 2001, and between South Korean and Japanese leaders from June 2005. The standstill ended when the next prime minister Abe visited China and South Korea in October 2006. In China, the visits contributed to widespread anti-Japanese riots, which were also accompanied by other more peaceful
large anti-Japan demonstrations across East Asia. The president, ruling and opposition parties, and much of the media of South Korea openly condemned Koizumi's pilgrimages. Many Koreans applauded the president's speeches criticizing Japan, despite the
South Korean President's low popularity. When asked about the reaction, Koizumi said the speeches were "for the domestic (audience)". ,
George W. Bush and
Vladimir Putin, 20 July 2001 Although Koizumi signed the shrine's visitor book as "Junichiro Koizumi, the Prime Minister of Japan", he claimed that his visits were as a private citizen and not an endorsement of any political stance. China and Korea considered this excuse insufficient. Several journals and news reports in Japan, such as one published by Kyodo News Agency on 15 August 2006, questioned Koizumi's statement of private purpose, as he unreservedly recorded his position on the shrine's guestbook as prime minister. He visited the shrine annually in fulfillment of a campaign pledge. Koizumi's last visit as prime minister was on 15 August 2006, fulfilling a campaign pledge to visit on the anniversary of Japan's surrender in World War II. Eleven months after his resignation as prime minister, Koizumi revisited the shrine on 15 August 2007 to mark the 62nd anniversary of Japan's surrender in
World War II. His 2007 visit attracted less attention from the media than his prior visits while he was in office.
Statements on World War II On 15 August 2005, the sixtieth anniversary of the end of World War II, Koizumi publicly stated that "I would like to express keen remorse and heartfelt apologies" and vowed Japan would never again take "the path to war".
Popularity , shortly before the
2004 G8 summit, hosted by the United States. Koizumi was an extremely popular leader at certain points in his tenure. His outspoken nature and colourful past contributed to that, and his nicknames included "Lionheart" and "Maverick". In January 2002, Koizumi fired his Foreign Minister
Makiko Tanaka, replacing her with
Yoriko Kawaguchi. Tanaka had enjoyed high public approval ratings. A few days before her dismissal, when she was filmed crying after a dispute with government officials, Koizumi generated controversy with his statement "tears are women's ultimate weapons". Following an economic slump and a series of LDP scandals that claimed the career of YKK member
Koichi Kato, by April Koizumi's popularity rating had fallen 30 percentage points since his nomination as prime minister. Koizumi was re-elected in 2003 and his popularity surged as the economy recovered. His proposal to cut pension benefits as a move to fiscal reform turned out to be highly unpopular. Two visits to North Korea to solve the issue of abducted Japanese nationals only somewhat raised his popularity, as he could not secure several abductees' returns to Japan. In the
House of Councilors elections in 2004, the LDP performed only marginally better than the opposition
Democratic Party of Japan (DPJ), winning 32 more seats than the latter obtained. In 2005, the House of Councilors rejected the contentious
postal privatization bills. Koizumi previously made it clear that he would dissolve the lower house if the bill failed to pass. The Democratic Party, while expressing support for the privatization, made a tactical vote against the bill. Fifty-one LDP members also either voted against the bills or abstained. On 8 August 2005, Koizumi, as promised, dissolved the House of Representatives and called for
snap elections. He expelled rebel LDP members for not supporting the bill. The LDP's chances for success were initially uncertain; the secretary general of
New Komeito (a junior coalition partner with Koizumi's Liberal Democratic Party) said that his party would entertain forming a coalition government with the Democratic Party of Japan if the DPJ took a majority in the House of Representatives. Koizumi's popularity rose almost twenty points after he dissolved the House and expelled rebel LDP members. Opinion polls ranked the government's approval ratings between 58 and 65 percent. The electorate saw the election in terms of a vote for or against reform of the postal service, which the Democratic Party and rebel LDP members were seen as being against. The
September 2005 elections were the LDP's largest victory since 1986, giving the party a large majority in the House of Representatives and nullifying opposing voices in the House of Councilors. In the following Diet session, the last to be held under Koizumi's government, the LDP passed 82 of its 91 proposed bills, including postal privatization. A number of Koizumi-supported candidates known as "
Koizumi Children" joined the Diet in this election and supported successive LDP governments until the
2009 elections, when most were defeated. ==Retirement==