Even though his nomination is opposed by the largest opposition party, Gakushuin University professor Kikuo Iwata appears to be a shoo-in to become a deputy governor of the Bank of Japan later this month, after the Diet holds its confirmation vote, likely Friday.
The Democratic Party of Japan has expressed concern that Iwata may rely on overly aggressive monetary easing in pursuit of the goal of 2 percent inflation put forward by Prime Minister Shinzo Abe, thus weakening the bank’s independence from the government.
But other minority parties appear to be falling into line for Iwata.
Nippon Ishin no Kai (Japan Restoration Party), which has three seats in the Upper House, on Wednesday opted to support Iwata, following similar decisions by Your Party, which has 12 seats, and Shinto Kaikaku (New Renaissance Party), which has two seats in the chamber.
The DPJ is supporting the two other nominees for BOJ leadership.
On Tuesday, it decided to back Asian Development Bank President Haruhiko Kuroda for governor and senior BOJ official Hiroshi Nakaso as deputy governor.
Nippon Ishin will also support Kuroda as BOJ governor and Nakaso as deputy governor. However, Your Party will oppose the nominations of both Kuroda and Nakaso.
The move paves the way for the three candidates to get the approval of the House of Councilors, where Prime Minister Shinzo Abe’s Liberal Democratic Party-New Komeito ruling coalition is 16 seats short of a majority.
The three nominees, presented by Abe late last month, must be accepted by both chambers of the Diet.
Lawmakers of Nippon Ishin said after their meeting that they value Iwata’s position for bolder central bank intervention to help defeat chronic deflation.
The professor pledged during confirmation hearings at Diet committees that he would resign as deputy governor if the BOJ is unable to achieve its 2 percent inflation target within two years, even though some experts say attaining the goal, jointly set by the BOJ and Abe’s government, will take longer.
The BOJ’s new leadership is set to take over later this month after current Gov. Masaaki Shirakawa steps down next Tuesday along with his two deputies.