When Junichiro Koizumi swept to victory as Japanese prime minister last April his election was seized on by the US administration as providing the best hope in years for structural reform and economic recovery in Tokyo.
The iconoclastic politician's campaign rhetoric of "reform without sanctuaries" and of "no growth without pain" may have been short on detail but it struck a chord, leading many to believe that here, at last, was someone capable of shaking Japan back to life.
Nine months on, as George W Bush met Mr Koizumi earlier this week, the US president was trying to assess whether Washington had got it right. There is a growing sense, inside and outside Japan, that Mr Koizumi may be less radical and more politically constrained than many once believed. His slow progress in enacting radical legislation, coupled with a recent fall in his popularity and a further slide in the economy, have led some to conclude that Mr Koizumi is a spent force.
"He has pursued the propaganda of reform but not the reality," says Nobuhiko Suto, a prominent member of the opposition Democratic party. "All the time he talks about reform. But what did he actually do? Almost nothing."
That interpretation might help explain the overnight collapse of Mr Koizumi's poll ratings following his sacking last month of Makiko Tanaka, his outspoken and popular foreign minister. Like Mr Koizumi, Ms Tanaka was seen by the public as ready to take on the rotten and self-serving elements of Japanese society. Her defeat by foreign ministry bureaucrats appears to have crystallised the perception that the Koizumi administration was not powerful or committed enough to defeat Japan's strong vested interests.
Without public support, Mr Koizumi is weak indeed. Almost an outsider in his own Liberal Democrat party, he holds little sway over party factions opposed to his agenda of breaking up the political and economic structures that have served them well for decades. Like Ms Tanaka, the prime minister had sought to ignore internal dissent by appealing over the heads of party apparatchiks directly to the public - four-fifths of whom said they supported his plans.
No more. "The Koizumi administration has now entered its second phase," admits one close adviser to Mr Koizumi. "His popularity has dropped from 80 per cent to 50 per cent. The numbers speak for themselves."
For those convinced that Japan needs a revolution of sweeping economic deregulation buttressed by fiscal rectitude, the slide in popularity comes as a severe - perhaps fatal - blow.
Certainly, there have been victories. He streamlined ministries, privatised some profligate state bodies and limited government debt issuance to 30,000 billion yen (€260 billion) a year in an effort to curb runaway public debt, already at 140 per cent of GDP.
But when push came to shove, say critics, Mr Koizumi backed down. They point to his reluctance to accept the grim state of the financial system, riddled with bad loans, and his consequent lack of urgency in clearing up the mess. Likewise, they say, Mr Koizumi's commitment to allowing debt-ridden "zombie" companies to go bust proved shallow; when economically important groups such as Daiei, the huge supermarket chain, teetered on the brink, his administration supported behind- the-scenes efforts to bail them out.
Has Mr Koizumi's revolution ended before it even got off the ground? Some people close to the US administration are now inclined to that view. But, publicly at least, Washington will continue to back the prime minister as the only potential leader providing a realistic hope of getting the world's second-largest economy moving again.
Takashi Tachibana, a well known political commentator, says it would be premature to write Mr Koizumi off now.
"By sacking Makiko Tanaka, he is in a stronger position politically," he says, arguing that LDP factional opposition will be appeased by her removal."
In Mr Tachibana's view, Mr Koizumi has another important advantage - the lack of a credible alternative. Although many elements within the LDP might not like him, few can think of anyone with sufficient support to mount a serious challenge.
"His opponents are not going to move until the people have decided that he's made a complete botch of reform," says Peter Tasker of Arcus Investment in Tokyo.
If that buys Mr Koizumi time, what is he going to do with it? Here, say some, is where a second advantage comes in to play: the growing sense of economic gloom. As Japan lumbers into its third recession in a decade, a raft of negative indicators is spreading fear that Japan may be in interminable decline. Nervousness about the state of the banking system, the fall of the Nikkei share index below 10,000 and a threat by Moody's to downgrade sovereign bonds to below the level of Botswana's, have added to the sense of impending crisis.
"What he needs is an excuse to act," says Clyde Prestowitz, a Japan expert at the Washington-based Economic Strategy Institute. "Although the economy has been stagnating for 10 years, personal income for those in work has risen. What he needs is a worsening of the economic situation."
Andrew Smithers, of London-based Smithers & Co, also believes that the worse things get the more likely action becomes. Unlike backers of Mr Koizumi's "reform without sanctuaries", Mr Smithers regards deregulation and corporate restructuring as largely irrelevant to economic recovery.
But he says that as Japan moves closer to the brink, the government will be stung into adopting sensible policies, namely engineering inflation and a weaker yen.
Indeed, in recent days, the government has exhibited a greater sense of urgency about tackling deflation (although it lacks concrete ideas) and has pledged to act decisively to prevent banking system collapse. - (Financial Times Service)
