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Aso used Hitler — responsible for the death of millions of Jews and others during World War II — in a bizarre reference about the importance of leaving a legacy in politics.
“What is important are results,” the veteran politician told a meeting of his faction of the governing Liberal Democratic Party on Tuesday.
“Even if the motive is correct, Hitler, who killed millions of people, was no good.”
On Wednesday Aso, who is also finance minister, retracted the remark but said he did not mean to defend Hitler’s motives.
“If you take my comment in its entirety, it is clear that my perception about Hitler is extremely negative and that Hitler was wrong in his motivation,” he said in a statement issued by the finance ministry.
“It was inappropriate that I cited Hitler as an example and I would like to retract that.”
It was not the first time Aso and other Japanese politicians have made casual references to Hitler and the Nazis.
In 2013 Aso drew international condemnation after he said Tokyo should learn from Nazi Germany when it comes to constitutional reform.
Aso — whose previous comments include criticising women who don’t have children and saying old people should “hurry up and die” to save healthcare costs — later retracted the comments but refused to quit.
This summer Bank of Japan board member Yutaka Harada praised Hitler’s economic policies even though they allowed him to do “horrible things”.
The US-based Simon Wiesenthal Centre, an anti-semitism watchdog, recently called for the American Academy of Plastic Surgeons to investigate Japanese TV celebrity cosmetic surgeon Katsuya Takasu after he praised the Nazis’ scientific contributions and appeared to deny the Holocaust.
Last year a Japanese teeny-bop girl band triggered outrage after wearing military-style costumes which resembled Nazi uniforms at a Halloween concert.
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