Kuroda gets Lower House nod for BOJ

Kyodo

The House of Representatives on Thursday approved the nomination of Asian Development Bank chief Haruhiko Kuroda for Bank of Japan governor, paving the way for a new team to take control of the central bank later this month.

The opposition-controlled House of Councilors will vote on Kuroda’s nomination on Friday.

The Lower House, which the ruling coalition led by Prime Minister Shinzo Abe’s Liberal Democratic Party controls, also voted on two proposed deputy governors — Gakushuin University professor Kikuo Iwata and BOJ Executive Director Hiroshi Nakaso.

The bank’s new leadership is set to take over Wednesday after BOJ Gov. Masaaki Shirakawa steps down on Tuesday, when the five-year terms of his two deputies end, rather than when his own term expires on April 8.

The Diet process will only allow Kuroda to serve for the remainder of Shirakawa’s term. After that, he will have to undergo another round of confirmations for his five-year term.

Kuroda is scheduled to leave the ADB on Monday.

The government proposed the personnel plan to the Diet on Feb. 28. Abe selected Kuroda because they share the same views on monetary policy.

BOJ nominations must be approved by both chambers of the Diet, but the ruling coalition lacks a majority in the Upper House.

The main opposition party, the Democratic Party of Japan, has decided to back Kuroda, an advocate of bold monetary easing, and the candidate is expected to get the final nod in the House of Councilors on Friday.

The DPJ has also decided to approve Nakaso but reject Iwata, citing what the party regards as his extreme stance on monetary policy. Iwata is nevertheless certain to become a deputy governor because a number of smaller opposition parties support him.

In 2008, the DPJ repeatedly rejected a series of BOJ nominees, resulting in the governor’s post being left vacant for about three weeks.