Fukuda to `Take Action
Japanese Prime Minister Yasuo Fukuda will “take concrete action'' next week to avoid a leadership vacuum at the central bank after the opposition rejected Toshiro Muto, a government spokesman said.
Fukuda will “think hard'' about how to avoid a vacancy when Bank of Japan Governor Toshihiko Fukui's term ends March 19, Chief Cabinet Secretary Nobutaka Machimura said today. The opposition-controlled upper house of parliament this week blocked Muto's nomination, saying his former post as the Finance Ministry's top bureaucrat threatens the bank's independence.
Should Fukuda fail to strike a compromise with the opposition Democratic Party of Japan, the central bank could become rudderless as growth slows, inflation accelerates and the yen rises. The Nikkei 225 Stock Average is down 18 percent this year and the yen strengthened through 100 to the dollar yesterday for the first time since 1995.
“The world will look with amazement at how this country could mess things up so bad politically,'' Gerald Curtis, a professor of political science at Columbia University, said in an interview with Bloomberg Television.
Extension
The government and the ruling coalition may propose a new candidate other than Muto to avoid worsening political gridlock with the DPJ, the Yomiuri newspaper reported, without saying where it obtained the information.
Tadamori Oshima, head of Liberal Democratic Party's diet affairs committee, called on Fukuda yesterday to make a decision quickly. “When you consider the schedule, we think March 17 is the latest possible date'' to act, he said cash advance in one hour payday advances.
The government may also be able to extend Fukui's term until lawmakers agree on a candidate, Noriko Hama, a professor of economics at Doshisha Business School in Kyoto.
“It's probably a workable solution,'' she said. “Fukui's not in a position to refuse.''
Japan's lower house, which is controlled by Fukuda's LDP, approved Muto yesterday after the upper house rejected him March 12.
Shirakawa
Because both chambers must approve central bank appointments, the government will eventually have to either propose new candidates or resubmit the same nominees. Both chambers approved one of two choices for deputy governor, Masaaki Shirakawa.
The opposition also blocked Takatoshi Ito, 57, as deputy governor in the upper house vote.
Shirakawa may end up leading the bank by default or be promoted to chief, Dan Harada, an analyst and founder of the Nagatacho Forum consulting company, said in an interview with Bloomberg Television.
Shirakawa, 58, is a former executive director of the bank who teaches economics at Kyoto University's graduate school. He supervised policy planning when the bank stopped injecting extra cash into the economy to overcome deflation, known as quantitative easing, and resumed targeting interest rates two years ago.
Filed under: legal by John