Bank of Japan Gov. Masaru Hayami intends to resign as early as May after three years at the helm of the central bank, sources close to him said Friday.
Hayami, whose five-year term ends March 19, 2003, has conveyed his intentions to staff at the Prime Minister’s Official Residence, they said.
Hayami, 76, has apparently decided to step down due to his age and for health reasons. But speculation is rife that the move is intended to take responsibility for his monetary policy management, which critics have called misguided for his unwillingness to keep interest rates virtually at zero.
In August, he took the lead in terminating the central bank’s 18-month-old zero-interest-rate policy, saying the economy was returning to a solid recovery track and would be able to withstand a rise in the unsecured overnight call money rate to 0.25 percent.
But the recovery began to slow later in 2000, triggering debate over his decision to scrap the policy, which was initially taken as an emergency measure.
Given the economic severity, the BOJ conducted a series of credit-easing steps earlier this year. On March 19, it decided at a policy meeting to take quantitative monetary easing action to prevent the economy from sliding back into recession.
Hayami is expected to officially tender his resignation after returning to Japan from Washington, where he will attend a meeting of Group of Seven finance ministers and central bank chiefs Saturday. He left Tokyo for Washington on Friday.
He will attend the G7 talks with new Finance Minister Masajuro Shiokawa. The G7 consists of Britain, Canada, France, Germany, Italy, Japan and the United States.
The sources said Hayami’s most likely replacement is former BOJ Deputy Gov. Toshihiko Fukui, currently chairman of the Fujitsu Research Institute.
Other candidates include Toyoo Gyohten, a former vice finance minister for international affairs and current head of the Institute for International Monetary Affairs, and Taichi Sakaiya, former head of the defunct Economic Planning Agency.
Jiro Ushio, chairman of Ushio Inc. is also a contender, they said.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.