In 1929, Ugaki was promoted to full general. Under Prime Minister Hamaguchi Osachi, he agreed to return as Army Minister in July 1929. However, the failure of Hamaguchi's economic policies after the start of the Great Depression and his push for demilitarization with the London Naval Treaty of 1930 enraged right-wing ultranationists. In 1931, although Ugaki refused to cooperate with them, he also failed to punish the insurgents responsible for the March Incident, an attempted coup-d'etat by young officers of the "Sakurakai" who sought to make him Prime Minister. Having lost the support of his fellow officers, Ugaki resigned from the military in April 1931 and once again accepted a posting as Governor-General of Korea.