would be tough for the Democrats to sign on. "As long as (the government) sticks to the provisional gasoline tax, it will be hard for the Democrats to agree since they have promised gasoline prices will fall by 25 yen," said Hidenori Suezawa, chief JGB strategist at Daiwa SMBC.
Without a deal the gasoline tariff and other measures such as an exemption to a 20 percent withholding tax in Japan's offshore market will expire come Monday.
Fukuda dodged the question of whether the ruling bloc would try to use its two thirds majority in the lower house to enact the tax legislation. That step can only be taken once the bills have either been rejected by the upper house or 60 days have passed since initial approval by the lower chamber on Feb. 29.
"I am not thinking about the future," he said. "What we need to do now is to avoid confusion in the people's livelihoods and local finances, and a negative impact on the Japanese economy."
The LDP would need the backing of its junior partner, the New Komeito party, some of whom might not be willing to go along given voter support for abolishing the tax.
At that point, Fukuda's only option might be to resign or to call a general election, some analysts said.
"There are two major problems. One is whether all the ruling parties can act together on a second vote," said independent political commentator Minoru Morita.
"There is strong opposition to tax increases among the people. If a lot of people abstain and they don't get a two-thirds majority, the Fukuda cabinet will have to step down en masse," he added.
