Pat Dollard | Young Americans

Feb. 17 (Bloomberg) — Japanese Finance Minister Shoichi Nakagawa resigned amid accusations he was drunk at a Group of Seven press conference, dealing a fresh blow to Prime Minister Taro Aso’s teetering government.

“I deeply apologize to the prime minister, the people and members of parliament for the significant trouble I caused,” Nakagawa, 55, told reporters in Tokyo today. Aso appointed Economic and Fiscal Policy Minister Kaoru Yosano to replace him.

Aso’s popularity has plunged as lawmakers from both sides of parliament criticized his handling of the economic crisis and a series of scandals and misstatements drew public ire. Nakagawa’s departure comes as companies from Toyota Motor Corp. to Sony Corp. fire thousands of workers and the nation heads for its deepest recession since World War II.

“I would not be surprised if this folly signals the death- knell” for Aso’s ruling Liberal Democratic Party, said Kirby Daley, senior strategist and head of capital introductions at Newedge Group in Hong Kong. Nakagawa’s “unthinkable behavior, and the fact that the prime minister did not immediately call for his job, reduces his own fledgling credibility.”

The Nikkei 225 Stock Average fell 1.4 percent in Tokyo, extending this year’s losses to 14 percent. The yen traded at 92.08 per dollar at 5:13 p.m. from 92.54 before the announcement.

Nakagawa’s resignation coincided with a Tokyo press conference by U.S. Secretary of State Hillary Clinton, at which she invited Aso, 68, to be the first foreign leader to meet President Barack Obama in Washington.