Japan cabinet purge underway as PM Kishida battles financial scandalw

Japanese Prime Minister Fumio Kishida set about replacing key cabinet members at the centre of a financial probe on Thursday, battling to control the damage from one of the biggest scandals his ruling party has faced in decades.

Kishida late on Wednesday said he was finalising the shake-up to restore public trust, with industry minister Yasutoshi Nishimura on Thursday saying he had resigned and ex-foreign minister Yoshimasa Hayashi confirming he had been asked to rejoin the cabinet.

Four ministers and several deputy ministers are set to go, local news outlets have reported, in the embattled premier's third cabinet overhaul since he came to office just over two years ago.

All four ministers hail from the biggest and most powerful faction in the ruling Liberal Democratic Party (LDP), which was formally led by late premier Shinzo Abe and is still commonly referred to as the "Abe faction".

Prosecutors have launched a criminal probe into the faction, and from Thursday will start questioning dozens of lawmakers for allegations of receiving about 500 million yen ($3.5 million) in total in fundraising proceeds missing from official party accounts, news outlets reported.

They are also looking into whether other LDP factions - including one led by Kishida until last week - are involved, according to the reports.

The prosecutor's office said it could not immediately comment on any ongoing investigation when contacted by Reuters.

Some political observers have compared the affair to the so-called Recruit scandal in the late 1980s when allegations of insider trading led then prime minister Noboru Takeshita and several other top government officials to resign.

Since news of the latest scandal broke a few weeks ago, Kishida has seen his public support drop to around 23 per cent, the lowest since he came into office in October 2021, recent polls have showed.

Support for the LDP has also fallen below 30 per cent for the first time since 2012, when it returned to power after a blip in its near total post-war dominance of Japanese politics.

The prime minister does not need to hold an election until October 2025, and a fractured and weak opposition has historically struggled to make sustained inroads into the LDP's hold on power.

But analysts say it remains to be seen whether Kishida can stay in the top job until the LDP leadership contest in September, and beyond.