Japan's lost decade heading toward the two-decade mark

“Many foreign investors see Kamei's appointment as a victory for old-guard LDP hardliners,” says Naomi Fink, Tokyo-based strategist at Bank of Tokyo-Mitsubishi UFJ Ltd.

Kamei has already managed to spook stock investors with a plan for a moratorium on loan repayments for small companies that would harm banks' profitability, asset quality and risk management.

He is set on halting the privatization of Japan's sprawling postal system to the dismay of investors awaiting its initial public offering.

Japan's new government deserves more time to fix an economy suffering from decades of neglect. It's also worth pointing out some early Hatoyama successes.

One is the zeal with which his team is scaling back on wasteful public-works projects such as unnecessary dams and bridges. Concrete Economics are a major reason Japan is shackled with the biggest public debt in the developed world: almost twice the size of its economy.

The Democratic Party of Japan aims to channel those vast funds to more productive pursuits.

Another is accelerating the process of pulling power away from bureaucrats and putting it in the hands of elected officials. It's the key to reducing corruption in an economic system in dire need of new energy and dynamism.

Hatoyama also made an impression in Pittsburgh last month at the Group of 20 summit.

Let's face it, the world didn't much care about Japan's last three premiers. The one that people overseas may remember most out of Japan's last 10 leaders was Junichiro Koizumi.

Who can forget his 2006 air-guitar performance at Elvis Presley's home in Memphis, Tennessee, as an amused President George W. Bush looked on?

It's this global-recognition vacuum that made Hatoyama's U.S. trip so significant.

The Stanford University Ph.D. even delivered a speech to the United Nations General Assembly in English — quite a novelty. There, he spelled out Japan's commitment to retool its economy and create an East Asian community similar to the European Union.

The U.N. crowd isn't accustomed to big thoughts from a Japanese leader.

The question, of course, is whether Hatoyama's party can do more than talk about change. His economic team is proving to be a disheartening liability.

Fujii's yen flip-flops are part of the problem. The bigger one is Kamei. Time is marching on.

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