Upper House OKs Yamaguchi

Kyodo News

The opposition-controlled Upper House forwent political deadlock Friday and approved Hirohide Yamaguchi as a Bank of Japan deputy governor, filling a key BOJ seat that has been vacant for more than six months because previous government picks were rejected.

The House of Councilors endorsed Yamaguchi, currently a BOJ executive director, in its morning plenary session before he received an afternoon nod by the House of Representatives, where Prime Minister Taro Aso’s Liberal Democratic Party-New Komeito ruling bloc maintains a majority.

The appointment of the BOJ governor, two deputies and six Policy Board members requires consent from both the upper and lower chambers.

One of the two BOJ deputy governor posts has remained unoccupied since April due to the political wrangling.

The breakthrough came as the Democratic Party of Japan announced earlier this week it would not block Yamaguchi’s nomination.

The DPJ had led the opposition camp and rejected a series of government proposals for the BOJ’s top and deputy chief posts in the Upper House, although the lower chamber voted for all those nominees.

The Upper House has rejected two nominees for the governor and two others for the deputy roles, citing various reasons, including that some of the candidates had served as a vice finance minister, which the DPJ said would hurt the BOJ’s independence in setting monetary policy.

Yamaguchi is a dyed-in-the-wool BOJ official and in charge of the central bank’s interest rate policy planning.

The DPJ’s affirmative response is also seen as a sign of urgency among lawmakers that political deadlock risks wasting time at a crucial moment for BOJ policy amid the global financial crisis and damages the reputation of Japanese politics in the world, observers say.

Timeline of BOJ hires, vacancies

Kyodo News

Following are key events related to the government’s nominations for leadership posts at the Bank of Japan: March 7, 2008 — Government nominates BOJ Deputy Gov. Toshiro Muto for governor. Masaaki Shirakawa, ex-BOJ director, and Takatoshi Ito, a University of Tokyo professor, nominated as deputies.

March 12 — The opposition-controlled House of Councilors votes down the nominations of Muto and Ito but approves Shirakawa.

March 13 — The ruling coalition-controlled House of Representatives approves all three nominees. Shirakawa is picked to be deputy governor.

March 18 — The government presents alternative candidates Koji Tanami, a former vice finance minister, for governor and Kiyohiko Nishimura, a member of the BOJ Policy Board, for the other deputy governor post.

March 19 — BOJ Gov. Toshihiko Fukui, Muto and another deputy, Kazumasa Iwata, end their five-year terms. Meanwhile, the Upper House approves Nishimura but rejects Tanami; the lower chamber approves both.

March 20 — Shirakawa and Nishimura assume their deputy governor posts.

April 7 — Shirakawa nominated as governor. Hiroshi Watanabe, a former vice finance minister for international affairs, proposed to succeed him as deputy.

April 9 — Shirakawa becomes BOJ governor after approved by Diet. Watanabe rejected by Upper House but approved in Lower House.

May 29 — The government nominates Kazuhito Ikeo, a Keio University professor, to succeed Nishimura on the Policy Board.

June 12 — The Lower House endorses Ikeo.

June 23 — The government declines to press for Ikeo after warned the opposition camp will reject him in the Upper House.

Oct. 15 — The government nominates BOJ Executive Director Hirohide Yamaguchi for deputy governor.

Oct. 24 — Both chambers of the Diet approve Yamaguchi as deputy governor.