The announcement by Japan's Prime Minister, Mr Ryutaro Hashimoto, that he intends to resign will cause further instability in the turbulent Asian markets and in the continent's beleaguered economies. The yen has taken early losses only to rebound in the hope that political defeat may force the government to implement reforms - but analysts predict the currency's prospects to be shaky. Hopes that the worst elements of a convulsion which has strongly upset not only Japan's Asian neighbours but countries such as Russia, Australia and South Africa, might come to an end have proved to be forlorn.
Japan is now entering a period in which the arcane internal wranglings of the ruling Liberal Democratic Party (LDP) will come into play as the search for Mr Hashimoto's successor gets under way. As in most political parties which have enjoyed a virtual monopoly of power, much of the most effective opposition has come from within the Liberal Democrats' own ranks.
If previous procedure is to be adhered to, disparate factions within the party will negotiate until an agreed candidate emerges. Officially, parliament decides who become premier but effectively the ruling party makes the real decision. Now, after its defeat in the elections for the upper house, the Liberal Democrats would first of all have to find independents and others to form "partial coalitions" in order to make up the numbers to ensure victory for its candidate. All this would, of necessity, take a great deal of time and the longer the political instability lasts the longer it might take to calm the economic turmoil.
Mr Hashimoto had little choice but to bow out as Prime Minister. The Japanese electorate has emphatically rejected his stewardship in a poll in which voters turned out in numbers considerably greater than expected. Promises of major tax reductions - contrary to what had previously been the core policy of the government - failed to make an impact. In fact the (eventual) populism of Mr Hashimoto's campaign appears to have accelerated voter rejection.
Voices are now being raised for a dissolution of the more powerful lower house to give the people, rather than the party, its say in the selection of the new Prime Minister. One of the country's most influential newspapers, the Asahi Shimbun, has already called for new elections. It has pointed out that a delay in the dissolution of the lower house - and an attempt by the LDP to cling to power - would merely prolong the stalemate in Japanese politics and increase mistrust both at home and in the international community.
Whether the crisis is resolved by negotiation or by the decision of the people, it is clear that a resolution should be reached as quickly as possible. So far, Asia's economic problems have been contained mainly within the region. A prolonged period of political and economic uncertainty in the world's second largest economy risks far more serious repercussions on a much wider scale.