Financial Services Minister Heizo Takenaka voiced regret Thursday over the resignation of top White House economist Glenn Hubbard.

“(Hubbard) is a man I have close personal ties with,” he said.

As chairman of the Council of Economic Advisers serving President George W. Bush, Hubbard had expressed strong support for Takenaka’s economic and financial policies.

He stepped down from his post Wednesday, citing personal reasons.

Takenaka, who also serves as economic and fiscal policy minister, said he will carefully monitor the running of the U.S. economy under Hubbard’s successor, Harvard University professor Gregory Mankiw.

But the Japanese government will not base any forecast on the course of U.S. economic policy solely on the replacement of Hubbard, he said.

Hubbard’s departure is the latest in a series of changes in Bush’s economic team, following last year’s resignations of Paul O’Neill as Treasury secretary, Lawrence Lindsey as a White House economic adviser and Harvey Pitt as chairman of the Securities and Exchange Commission.

Call to stop deflation

WASHINGTON (Kyodo) White House chief economist Glenn Hubbard voiced hope Wednesday that Bank of Japan Gov.-nominee Toshihiko Fukui will undertake aggressive policies to end deflation in Japan.

“What market participants, I think, will look to is a policy that tries to arrest deflation more permanently than the Japanese central bank has done in the past,” Hubbard, chairman of the White House Council of Economic Advisers, told reporters after a Senate hearing.

“This is an opportunity for the central bank to make that change,” he said.

Hubbard, who will step down Friday and be replaced by Harvard University professor Gregory Mankiw, said arresting deflation is an important priority not only for Japan but also for the world economy.

Prime Minister Junichiro Koizumi has named Fukui, a former BOJ deputy governor, as the new central bank chief to replace Masaru Hayami, who will be stepping down March 19 after five years in office.

Fukui, 67, currently chairman of Fujitsu Research Institute, will become the new BOJ chief for a five-year term, pending approval by the Diet.

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