His government is now likely to call elections in June after it has passed the current year's budget, delayed in the Diet for the past three months. But all initiatives on political reform, reducing the country's trade surplus and even the more pressing need to overhaul the tax system have effectively been paralysed.
Mr Hata was elected by the Diet on Monday, but in the early hours of Tuesday the Socialist Party announced they were abandoning his coalition because several of the right-wing parties formed a grouping which excluded them. Mr Hata has just 182 seats in the 511-member Diet.
Yesterday Mr Hata said he would form a cabinet by the end of today, since Japan begins 10 days of holidays on Friday. Mr Hata and his ally, Ichiro Ozawa, hope to use the holidays to persuade the Socialists to rejoin the government. Their chances appear very slim.
Meanwhile, the Socialists and the Liberal Democratic Party (LDP), who for four decades were rivals across the Cold War fence, yesterday agreed to co-operate as the two main opposition parties. Without betraying a trace of irony, Koken Nosaka, the Socialists' Diet Affairs Committee Chairman, said both parties agreed on the need for 'faith and trust' in their parliamentary alliance.
Until now both parties regarded each other as bitter enemies, and they are unlikely to be more than temporary political bedfellows.
Technically the LDP or the Socialists could call an immediate motion of no-confidence in Mr Hata's government. However, an unspoken concensus exists on the need to pass this year's budget for Japan, particularly as the country is still in the midst of a recession.