Can Hatoyama Be Japan's Change Agent — At Home and Abroad?

Prime Minister Yukio Hatoyama wants a more equal relationship with Washington, but nobody's quite sure what that means

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Illustration by Edel Rodriguez

In mid-1950s Japan, during the years after the country's devastating defeat in World War II, Prime Minister Ichiro Hatoyama believed his island nation should not become too subservient to the U.S. To make his point, he flew to Moscow to normalize relations with the Soviet Union. It was a bold stand to take at the opening of the Cold War — and one that ultimately failed. Despite Hatoyama's views, Japan locked itself firmly into the U.S. orbit, becoming America's key Asian ally.

Now Ichiro's grandson Yukio is taking a shot. In a major turning point for modern Japan, Yukio Hatoyama's Democratic Party of Japan (DPJ) won a landslide victory in parliamentary elections last year, tossing out the staunchly pro-U.S. Liberal Democrats, who had reigned almost interrupted since 1955. Hatoyama, 63, with an engineering Ph.D. from Stanford University, followed his granddaddy into the Prime Minister's post and immediately set about changing Japan's economy, government — and relationship with the U.S. "It was always in response to what the U.S. had to say that Japan followed," Hatoyama told TIME in an exclusive interview in his Tokyo office. "I believe we should say to each other what we need to say. The time has come for us to seek a more equal relationship."

It is far from clear what, precisely, Hatoyama means by "more equal," but there's little doubt that his government policy has completely altered the tenor of relations between the U.S. and its closest ally in Asia. Twenty years ago, Tokyo and Washington routinely sparred, most often over trade, but in the past decade the two nations seemed to become closer than ever. Japan backed America's antiterror campaign, for example, by marshaling refueling missions in the Indian Ocean to support U.S. forces in Afghanistan. Japan was looking more American at home as well. Under Junichiro Koizumi, Prime Minister from 2001 to 2006, the government adopted several free-market reforms to try to restore growth to the perpetually sluggish economy.

Hatoyama has thrown those policies in reverse. Critical of what he has called U.S.-led "market fundamentalism," Hatoyama has rejected Koizumi's now unpopular market reforms and is steering the economy toward something akin to a European-style welfare state with a wider government-funded social safety net. Though Hatoyama has continued to stress the crucial nature of the U.S.-Japan alliance and his friendly relationship with President Barack Obama — "We have come to call each other Barack and Yukio," he said during Obama's November visit to Tokyo — he has also backed away from policies that Washington views as vitally important to its global security priorities. In January, Hatoyama ended the refueling missions in the Indian Ocean, just as Obama was ramping up operations in Afghanistan. Most irritating to Washington has been Hatoyama's effort to renegotiate an important agreement on the redeployment of American troops stationed on the Japanese island of Okinawa. Hatoyama's stand has caused a rare chill to beset Japan-U.S. ties, leading some Japan watchers to fret over the health of the alliance. "This is probably the lowest point [for U.S.-Japan relations] since the early 1990s," when the two were engaged in bitter trade wars, says Takatoshi Ito, an economist at the University of Tokyo.

At home, Hatoyama's ideas have struck a chord with those who want their country to chart a new course. For decades — ever since its defeat in World War II, in fact — Japan has struggled to define its role in the world. Though in many respects a political and economic power in its own right, Japan has remained reliant on the U.S. for its own security. (Japan's postwar constitution renounces the use of force in international disputes.) The stabilizing presence of the U.S. military in Asia is as crucial as ever to Japan, which shares the same neighborhood as a rising China and a belligerent, nuclear North Korea. But dependence on the U.S. has led some Japanese to lament that they don't live in a "normal" country, one responsible for its own defense and foreign affairs, and Hatoyama's talk of a more equal partnership has played well with an electorate bruised by a perception that Japan often plays the little nephew to Uncle Sam.

The Japanese public's desire for change goes far beyond the realm of foreign relations. They ushered Hatoyama into office to breathe new life into an ossified political system that proved incapable of reversing the slow-motion decline of Japan's economy and global influence, a phenomenon the Japanese call "Japan passing." Thirty years ago, Japan was much like the China of today, an up-and-coming global power with an economy that was the envy of the world. Japanese companies such as Sony, Toyota and Honda shoved aside their competition from the West. By the late 1980s, Americans came to see Japan's economic firepower as arguably a bigger threat to U.S. global dominance than the nuclear arsenal of the Soviet Union. Today, however, no one is scared of Japan. Growth has been anemic ever since a property-and-stock-price bubble collapsed in the early 1990s. China is likely to supplant Japan as the world's No. 2 economy this year; Beijing is usurping Tokyo's political influence in Asia as well. Once lauded Japanese corporate management has grown isolated and out of touch — symbolized by the recent recall fiasco at Toyota. Even the country's reputation as a paragon of environmental progress has been shaken by outrage over the slaughter of dolphins, graphically depicted in the Oscar-winning documentary The Cove.

Hatoyama seems an unlikely choice to fix the mess. A politician for 27 years, he is as much a member of Japan's élite as the politicians he kicked out of office. The Hatoyamas are the bluest of bluebloods, with a long history in politics and big business. (His father served as Foreign Minister, while his mother's family founded tire giant Bridgestone.) The most unusual thing about him may be his wife Miyuki, who created an international stir by revealing she believed her soul was abducted by aliens and taken to Venus. Ironically, however, it is Hatoyama himself who is widely known as "the alien," the genesis of which has been credited to his often cryptic turns of phrase that leave Japanese guessing about his true opinions. "He's a very mysterious guy," says Masatoshi Honda, a professor of Japanese politics at the National Graduate Institute for Policy Studies in Tokyo. "We still don't know who Hatoyama is."

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