It's a bad sign for any politician to have to start the New Year with an apology for a brewing scandal. But with two former aides indicted by prosecutors for fund-raising illegalities last month, Japanese Prime Minister Yukio Hatoyama had to do just that in his first address of 2010. With both Mr. Hatoyama and his co-leader of the Democratic Party of Japan, Ichiro Ozawa, embroiled in the controversies, some may wonder if old-fashioned political scandal will short-circuit Japan's new era of hope and change

Both Messrs. Hatoyama...