Japanese premier pulls himself back from brink of political demise. With help of falling yen, Nakasone breaks resolve of party rivals

Japanese Prime Minister Yasuhiro Nakasone is proving once again that he has more political lives than the proverbial cat. Less than two weeks ago he seemed finished politically, when his opponents within the ruling Liberal Democratic Party (LDP) blocked his plan to hold early parliamentary elections on June 22. The elections are seen as a bid by Mr. Nakasone to hold on to power when his term as party president ends this October.

But now, after complex and often murky maneuvers, the prime minister has reversed his fortunes. After a special session of the Diet (parliament) in early June, he is expected to dissolve the Diet and hold simultaneous elections for both the upper and lower houses of the body. Those elections are expected to take place in July, at the earliest on July 6.

How did Nakasone manage this turn of events? Political observers here cite several factors.

The direction taken by the value of Japan's currency, the yen, is a key element. The rapid rise of the yen's value has been a major cause of the prime minister's political problems. The economic distress triggered by the rise, especially to export industries, has been the major issue used by Nakasone's rivals within his ruling party. The yen appeared headed for unprecedented levels after the recently concluded summit of Western leaders, giving confidence to anti-Nakasone forces here.

Last week, however, following testimony by United States Treasury Secretary James Baker, the yen reversed course for the first time since last October. The dollar has been rising in value on currency markets. This has proved to be politically fortuituous for the Japanese prime minister, taking the wind out of his opponents' sails.

With aid from the yen developments, he has been able to break down the resolve of those opposed to holding elections. Party leaders who were worried about their prospects in the elections because of the economic consequences of the high yen shifted their position. Many members of the Diet have raised considerable sums of money in anticipation of elections, creating a built-in incentive to go ahead with them.

The most important change in position occurred at the top levels of the party. Several party leaders who had previously blocked Nakasone's desire for simultaneous elections (upper-house elections are required to take place anyway), suddenly reversed their stand. The most important such figures were Party Secretary-General Shin Kanemaru, a member of the largest faction within the LDP (that of former Premier Kakuei Tanaka), and Foreign Minister Shintaro Abe, heir apparent to the faction of former Premier Takeo Fukuda.

Their change of heart is apparently based on the belief that even with an election victory, Nakasone will step down from the premiership this fall. Mr. Abe and Tanaka-faction leader Noboru Takeshita are considered strong candidates to succeed Nakasone. Mr. Kanemaru, informed sources say, is convinced that Nakasone will make way for one of them and not seek to extend his stay, which party rules say must end in October, at the end of his second term.

However, other party leaders are clearly not convinced that Nakasone, once buoyed by an election win, will readily give up power. Former Foreign Minister Kiichi Miyazawa, who is the third major candidate for prime minister, has strongly opposed the election decision. His faction in the party has mounted a last-ditch resistance effort, forcing a meeting of the party Executive Council yesterday. In the meeting, however, Miyazawa appeared to have yielded to the overwhelming momentum toward elections.

The events of the past week have been a classic demonstration of the Byzantine and unpredictable nature of the inner life of the ruling conservative party. The months ahead are certain to be equally difficult to forecast.