As of 12 p.m. ET DJIA 10132.62 À 1.08% FTSE 100 5151.32 g 0.23% Nikkei 225 9603.24 g 1.12% Shanghai Comp. 2571.42 À 0.12% Hang Seng 19471.80 g 0.13% Sensex 16741.84 À 1.02% S&P/ASX 200 4381.03 g 0.73% Hon Hai to increase wages looks for a new for its workers in by 30% leader and new ideas BUSINESS & FINANCE 17 EDITORIAL & OPINION 11, 13 KNPS681/00(257 KNP 351/00(281 IA()N.081/09S.MNE ..N:0/KMNE/CJ19 G.4SP 1998 SEPT 4 TGL. 01/SK/MENPEN/SCJJ/1998 NO: R.I. MENPEN SK. 048/10/2009 NO. (P) MICA US$2.50 (025811) Vietnam: 9315/10/2010 Baht50.00, PP Thailand: KKDN NT$60.00, Taiwan: VAT), Yen500 Slrs180(Incl Japan: Lanka: PPN), Sri (028507) Rp18,000(Incl GST), 648/11/2010 Indonesia: S$4.00(Incl PPS Singapore: Rs25.00, KKDN Peso80.00, India: Philippines: HK$18.00, Rs140.00, Kong: Pakistan: Hong RM6.00, RMB25.00, Malaysia: China: B$5.00, Brunei: GST), A$6.00(Incl Australia:

VOL. XXXIV NO. 192 (India facsimile Vol. 1 No. 253) ** ASIA Thursday, June 3, 2010 asia.WSJ.com Race begins for Japan’s top spot

Kan plans to run; In the wings | Potential Hatoyama successors U.S. plan to shift a big job will be Okinawa base to ease voter ire , 63 stays contentious BY YUKA HAYASHI Finance Minister BY YUKA HAYASHI TOKYO—After Prime Min- Kan won fame in the 1990s TOKYO—The contentious ister ’s sud- as health minister for issue of relocating U.S. troops den resignation on Wednes- exposing the bureaucracy's in Okinawa will continue to be day, the ruling Democratic responsibility for providing a challenge for Washington Party of Japan launched the hemophiliacs with and Japan’s new prime minis- process of selecting its new HIV-tainted blood. ter as persistent local opposi- leader, racing to prepare for tion will make it extremely Ic C) oe:Won2,500, Korea: JCT), (Incl an uphill battle in next difficult to implement a key month’s national elections. bilateral accord to build a new Finance minister Naoto Seiji Maehara, 48 military facility. Kan was the first to announce After Mr. Hatoyama an- his intention to run for the Transport Minister nounced his resignation, cit- top job. His victory, which is Maehara has in the past ing his failure to garner do- widely expected, would make defied Hatoyama and other mestic support for the new him the second leader since party leaders for their accord, officials in Okinawa the DPJ swept to power in shifting stances and repeated their opposition August’s historic elec- fund-raising difficulties. against the relocation of a ma- tions—and Japan’s fifth prime jor U.S. Marine base to a new minister in less than four offshore facility in another years. part of the island. The plan is Mr. Kan, a 63-year-old key part of the pact signed party veteran with more than , 56 last week, which affirmed three decades in parliament, strong security ties between is seen by many as the safest Foreign Minister the two nations at a time of bet to steer the DPJ out of its escalating tension in East Okada has trade and rut. Asia. It turned out to be foreign-policy credentials The new leader’s first task highly unpopular with the as well as a clean and will be to calm voter anger Japanese and prompted a serious image. over a broken campaign Japanese Prime Minister Yukio Hatoyama leaves his official party to leave the ruling coali- promise to reduce the U.S. residence after announcing his resignation on Wednesday. tion. military presence in Okinawa, Yoshiyasu Iha, mayor of Gi-

as well as ire over political- Associated Press (Kan); Bloomberg News (Maehara); Reuters (Okada, Hatoyama) Please turn to page 6 funding scandals that claimed the jobs of Mr. Hatoyama and “During the short time un- Kan told reporters. “I would trated with top party leaders’ potential candidates are Seiji A new administration could Ichiro Ozawa, a powerful sec- der Prime Minister Hatoyama, like to take over the job and old-fashioned governing style, Maehara, a 48-year-old trans- orchestrate a weaker yen...... 7 retary-general who also an- we were unable to fulfill the make sure it gets done.” some DPJ members are likely port minister known for his Heard on the Street: The nounced his resignation expectations presented to us Other candidates are likely to push for candidates from practical economic-policy perils of a revolving door.... 32 Wednesday. from the voters last fall,” Mr. to emerge. Increasingly frus- younger generations. Among Please turn to page 6 Prudential’s new task: what now?

BY DANA CIMILLUCA creased the proportion of the AND NEIL SHAH 162-year-old insurer’s operat- ing profit coming from Asia to Prudential PLC’s failed more than half from about a $35.5 billion bid to acquire quarter. By publicly declaring American International their intention to so radically Group Inc.’s sprawling Asian overhaul the company, the life-insurance business leaves men, as well as Prudential’s the company with a tough and board, have left themselves less glamorous new task: con- open to the impression that juring up a convincing new they don’t view the company’s strategy. current strategic position as Prudential is in discussions ideal. with AIG to terminate its in- Before presenting a new tended purchase of AIA Group strategy, Prudential will have

Ltd., as the unit is known, af- Reuters to pay about £450 million ter shareholders of the U.K. Prudential says it will return to its strategy prior to the AIA deal. ($660 million) to cover the insurer balked at the deal’s costs of the failed deal. The price and AIG refused to rene- jobs—will be to craft a strat- pace than the AIA deal would biggest portion of that will be gotiate. An announcement is egy that will boost a stock have allowed. a termination fee payable to expected soon heralding the that is little changed in the Prudential, which is unre- AIG of £153 million. It also official end of the deal. past four years as well as lated to Prudential Financial Please turn to page 16 The challenge now for Pru- soothe investors frustrated by Inc. of the U.S., coveted AIA as dential Chief Executive Ti- the turbulent last few months. a means of swiftly boosting Agents on both sides of the djane Thiam and Chairman The new strategy is likely to its presence in a handful of deal breathe easier ...... 16 Harvey McGrath—in addition keep the company’s focus on fast-growing markets in Asia. Heard on the Street: AIA to holding on to their Asia, but at a less audacious The AIA deal would have in- needs some polishing ...... 32