TOKYO (Reuters) -- Fallout from a scandal-tainted minister's suicide and mismanaged pensions swirled on Tuesday, threatening the chances that Japanese Prime Minister Shinzo Abe's ruling camp can win a July upper house election.

Agriculture Minister Toshikatsu Matsuoka's suicide on Monday, hours before he was to face questioning in parliament, coincided with a slump in Abe's approval ratings ahead of a July upper house election, his first big electoral test.

On Tuesday, a former executive of a public corporation at the center of a bid-rigging scandal to which Matsuoka had been linked was found dead in an apparent suicide, Kyodo news agency said.

"I am worried that (recent developments) will have considerable impact on the upper house election," Environment Minister Masatoshi Wakabayashi, who will fill in as farm minister told reporters after the regular cabinet meeting. "It will be tough for the Liberal Democratic Party."

Matsuoka, 62, had come under fire for a series of political funding scandals, and questions about his suitability for the farm post were raised as soon as he was appointed in September.

Domestic media said Abe bore responsibility for appointing the scandal-tainted Matsuoka and keeping him in the post.

"This is a major blow ahead of the upper house election," said the conservative Sankei newspaper of the suicide. -------------------------- Damaging affair

Ordinary voters agreed the affair was damaging.

"Abe's ability to lead and bring together a team may be called into question," said Masayoshi Motteki, 62, who runs a restaurant and said he supports the LDP.

A loss by the ruling coalition in the upper house election would not force Abe to resign, since the more powerful lower chamber elects the prime minister. But defeat would allow the opposition to block key legislation and a major loss would almost certainly spark calls from his own party for him to step down.

Analysts say a setback for Abe's pro-market government in the poll could sour foreign investors' view on Japanese stocks.

Abe's popularity had sagged sharply even before the suicide, mostly because of voter outrage over the failure of the government to keep track of some 50 million pension premium payments, meaning retirees could be short-changed.

Anger over corruption was another factor.

A survey by the Asahi newspaper conducted before the suicide and published on Tuesday showed Abe's support rate had sunk to 36 percent, down eight points from just a week ago and the lowest level since he took office in September. Chief cabinet Secretary Yasuhisa Shiozaki told a news conference the government would "do all we can to secure public confidence in public pensions."

Opposition parties were threatening to submit a no-confidence motion against the health minister on Tuesday if the ruling camp went ahead with its plan to push through the lower house a bill to drastically reform the scandal-plagued Social Insurance Agency, which manages public pensions.

"The short-term blow is very bad for the cabinet," said Koichi Nakano, a political science professor at Sophia University. "But once interest runs out, there is still time before the actual campaign," he added, noting Matsuoka's death had deprived the opposition of an easy target to attack.

Some voters said, though, they would not soon forget.

"This incident will still be in my head at the time of the election, so I think it would influence the way I vote," said 23-year-old Internet company worker Megumi Kumatabara.

Abe, at 52 Japan's youngest prime minister since World War II, was brought in by the ruling Liberal Democratic Party (LDP) last September on hopes his youth and dapper style would buoy support for the party ahead of the upper house poll.

He soon won praise on the diplomatic front for repairing ties with China that had chilled under his predecessor.

But support for Abe, who is pushing a conservative agenda that includes revising Japan's pacifist constitution and boosting its global security role, sagged after gaffes and funding scandals, including one that forced a minister to resign.

The LDP and its junior partner need to win a total of 64 of the 121 seats up for grabs in the July election to maintain their majority in the 242-seat upper house. Some analysts had said that would have been tough even before the latest developments.