Japanese Prime Minister Shinzo Abe suffered his biggest setback since taking office in 2012 on Monday as his new trade and industry minister resigned over questionable political spending and some media said his justice minister might also be replaced.
Trade and industry Minister Yuko Obuchi, 40, the daughter of a prime minister and tipped as a future contender to become Japan's first female premier, told a news conference she was resigning following allegations that her support groups misused political funds.
Obuchi was one of five women appointed by Abe in a cabinet reshuffle less than two months ago -- a move intended to boost his popularity and show his commitment to promoting women as part of his "Abenomics" strategy to revive the economy.
As head of the powerful Ministry of Economy, Trade and Industry (METI), Obuchi, a telegenic mother of two, was tasked with selling Abe's unpopular plan to restart offline nuclear reactors to a public worried about safety after the March 2011 Fukushima nuclear disaster.
"We cannot let economic policy and energy policy stagnate at METI because of my problems, so I will resign my position," a solemn Obuchi told a nationally televised news conference, bowing deeply in apology.
Kyodo news agency said Abe was also considering replacing Justice Minister Midori Matsushima. The opposition Democratic Party on Friday filed a criminal complaint against Matsushima, accusing her of violating the election law by distributing paper fans to voters. The party has demanded that she resign.
Besides Obuchi and Matsushima, Defence Minister Akinori Eto has also questions from the opposition over his political funds.
Abe's public support has fallen and the scandals come as he prepares for tough policy decisions including whether to raise an already unpopular sales tax.
Opposition takes aim
Obuchi's departure is the first cabinet resignation for Abe, who took office in December 2012 for a rare second term, promising to revive Japan's stalled economy and strengthen its security stance to cope with challenges such as a rising China.
Abe's first stint as prime minister in 2006-2007 was marred by scandals among his ministers - several quit and one committed suicide. Abe himself resigned after just one year in the face of parliamentary deadlock, sliding support rates and ill health.
His current government had been little touched by scandal until the cabinet rejig, but opposition parties quickly took aim at the new appointees.
Abe must decide by year-end whether to proceed with a planned but unpopular hike in the sales tax to 10 percent, after a rise in April to 8 percent pushed the world's third-largest economy into its deepest quarterly slump since the 2009 global financial crisis.
Abe's support has begun to sag, falling 6.8 percentage points to 48.1 percent in a weekend survey by Kyodo news agency from last month. Nearly two-thirds opposed a second tax hike and almost 85 percent said they didn't feel the economy had recovered.
Media reports of Obuchi's funding irregularities emerged on Thursday. On Saturday, NHK said two Obuchi political groups spent 43 million yen (400,000 U.S. dollars) on annual theatre events between 2009 and 2011 and kept no record of spending on the 2012 event.
Obuchi said on Monday that an examination of records had uncovered questionable outlays for the theatre events and she would ask outside accountants and lawyers to take a closer look.
Abe had hoped the soft-spoken Obuchi would be able to ease opposition to atomic power, but political analysts say the controversy could hamper Abe's plan to reboot reactors, opposed by more than 60 percent of voters in the Kyodo survey.
Abe's ruling coalition has a hefty parliamentary majority, the opposition is fragmented and no general election need be held until 2016, but the opposition Democratic Party has taken aim at new ministers in debates to try to dent Abe's popularity.