Prime Minister Abe delivered a policy speech to a plenary session of the House of Representatives and the House of Councillors on Monday, September 10th, after the opening ceremony of the 168th session of the Diet.

Shinzo Abe announced Wednesday  that he will resign as Japanese Prime Minister, following twelve months of weak leadership and political scandals.

Abe, who is the son of a former prime minister, was elected Prime Minister of Japan on September 26, 2006, following in the wake of the charismatic leadership of Junichiro Koizumi, who had restored confidence to Japan following almost two decades of economic turmoil.

Abe (52) took office as Japan's youngest leader in 65 years, but had been unable to win back public trust, in particular after the government said it mismanaged 50 million pension records.

Abe's decision to resign comes six weeks after his ruling Liberal Democratic Party was badly trounced in elections to the upper house of parliament, and his ruling coalition lost control of that chamber, making it difficult to govern effectively.

Abe was facing a tough challenge in pushing through tax reform and last week-end, he said he could resign if his government fails to win an extension of the mandate for Japan's mission to refuel jets operating in Afghanistan.

The opposition Democratic Party of Japan said it would vote this down in the upper house, making it hard for Japan to continue the operations and play an active role in its military alliance with the US.

Analysts say that the LDP-led coalition is likely to choose Taro Aso (65) to succeed Abe. Aso was foreign minister until last month and is secretary-general of the LDP. He like Abe, supports deregulation and holding down taxes. He is also viewed as a more experienced political operator and may have more success at executing his policies.

Japan is facing serious economic challenges and the economy contracted in the second quarter of 2007.