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Diet asked to OK Kuroda as next BOJ chief; opposition seen falling into line

by Reiji Yoshida

Staff Writer

Haruhiko Kuroda, the 68-year-old Asian Development Bank chief and a strong advocate of aggressive monetary easing, was officially nominated Thursday as the next Bank of Japan governor.

The Diet was also asked to confirm BOJ Executive Director Hiroshi Nakaso, 59, and Gakushuin University professor Kikuo Iwata, 70, as vice governors. Deputy Chief Cabinet Secretary Katsumata Kato presented the list of nominees to the Diet Steering Committee of the Lower House.

Opposition parties may find it hard to block Prime Minister Shinzo Abe’s BOJ candidates, all of whom support bold credit easing policies. In recent days, Abe’s calls for such steps have apparently had a positive impact on financial markets.

Since Abe took power in December, stock prices have soared while the yen has fallen against the dollar, benefiting exporters.

Kuroda and Iwata in particular have been strongly critical of the BOJ’s reluctance to adopt radical monetary easing measures.

Democratic Party of Japan lawmaker Shu Watanabe, who sits on the Diet Steering Committee, said the largest opposition force will make its decision only after a hearing is held, possibly as early as next week.

The DPJ, Your Party and other opposition camps have called on the ruling bloc to arrange longer-than-usual sessions for each of the three BOJ executive candidates.

“Not only Japan but also the whole world is watching who will head the BOJ,” Watanabe told reporters.

“We can’t make a decision if a hearing lasts only a few minutes,” he said.

The Liberal Democratic Party-New Komeito ruling coalition is angling for a vote on the three in the Lower House on March 14 and the following day in the Upper.

The terms of the current vice governors, Kiyohiko Nishimura and Hirohide Yamaguchi, end on March 19. Although BOJ Gov. Masaaki Shirakawa’s tenure doesn’t expire until April 8, he will step down with them.

With a majority in the Upper House, the opposition parties could, if they remain united, block the government’s BOJ nominees.

Your Party, which holds 12 seats in the 242-seat upper chamber, has indicated it may vote against Kuroda, arguing that to put the former head of the Finance Ministry at the top of the BOJ would blur the line between fiscal and monetary authorities.

Meanwhile, Diet members from Nippon Ishin no Kai (Japan Restoration Party) seem to support the three. However, Osaka Mayor Toru Hashimoto, coleader of the party, which holds three seats in the Upper House, would rather see Iwata trade places with Kuroda, whose monetary easing philosophy is less radical.

On Wednesday, Sakihito Ozawa, Nippon Ishin’s Diet affairs chief, reportedly called Hashimoto’s idea “unrealistic,” and said Kuroda would not accept an offer for the vice governorship.

On Thursday he apologized to Hashimoto, who threatened to resign if lawmakers in Tokyo ignore his opinions.

At a news conference on Thursday, DPJ President Banri Kaieda urged politicians not to credit Abe’s calls for aggressive monetary easing too much for boosting stock prices and pushing down the yen, noting that it is the nature of financial markets to fluctuate.

He pointed out that recent tumult in the Italian Parliament and growing concerns about the European financial system had pushed up the yen against the dollar by nearly ¥4 in a single day.

  • itoshima2012

    The view of the weak yen benefiting the Japanese economy is extremely misleading and frankly I wonder why the Japanese public is swallowing this. Only the LDPs cronies will benefit, i.e. the big exporters which are already benefiting by tax loopholes ecc. The average guy on the street will obviously be worse off since a) energy bills will go up, food costs will go up ecc. Japan is relying over 70% on imported food and the weak yen will do havoc. The signs are clearer than crystal, Abe’s policies and his pick for BoJ governor are only exasperating an already dire situation. The shit hits the fan so to speak and with a debt to GDP ratio North of 250% and an aging society we don’t have a European Financial Rescue Umbrella….