In more than three weeks since becoming financial services minister, Shizuka Kamei has sent bank stocks plunging, accused the Bank of Japan of sleeping on the job and blamed the nation’s biggest business lobby for increasing the murder and suicide rates.
His comments have drawn rebukes from Prime Minister Yukio Hatoyama and other members of the ruling Democratic Party of Japan. The 72-year-old former police official remains unfazed, telling the media Hatoyama “can’t replace me” and that he has the prime minister’s full confidence.
Kamei is the beneficiary of a deal Hatoyama made to ensure he can push laws through the Upper House. As leader of Kokumin Shinto (People’s New Party), Kamei can guarantee the coalition government five votes in the 242-seat upper chamber. Though Hatoyama’s DPJ won a landslide in the 480-seat Lower House in August, his party lacks a majority in the Upper House.
“Kamei’s support in the coalition is indispensable,” said Koichi Nakano, a political science professor at Sophia University in Tokyo. “He’s saying all these things in full knowledge that’s the case. He could be very disruptive for Hatoyama.”
Kamei on Oct. 6 criticized suggestions by BOJ officials that the economy is improving, saying “the BOJ sometimes sounds like it’s talking in its sleep.”
The day before, he told a business forum in Tokyo that companies have stopped treating people as human beings and have thus contributed to murders and suicides. The Japan Business Federation (Nippon Keidanren) “should feel responsible for this,” he was quoted as saying.
Hatoyama, 62, told reporters the next day that the comment “was probably excessive,” and that his bank regulator “should use words that are easier to hear.”
Kamei has been giving interviews and making public appearances domestically more than Hatoyama, who in his first month in office has been to the United States for the Group of 20 summit and U.N. General Assembly, as well as to Copenhagen for Tokyo’s failed bid to win the 2016 Summer Olympics.
The public faces of the economy have been Kamei and Finance Minister Hirohisa Fujii, 77, whose comments on the yen have also moved markets. The currency traded near a seven-month high against the dollar when he said Sept. 16 that he didn’t support a “weak yen.”
Kamei has a history of controversial stances. In 2005, then Prime Minister Junichiro Koizumi kicked him out of the Liberal Democratic Party for opposing a plan to privatize the postal system. Kamei immediately formed his own party and persuaded ex-Peruvian President Alberto Fujimori, then under house arrest in Chile, to run for a seat in the Upper House in 2007. Fujimori lost and in April was sentenced to 25 years in prison in Peru for human rights violations.
Kamei on his Web site blames “unbridled capitalism led by the U.S.” for the global financial crisis.
“Hatoyama must be ruing the moment he gave Kamei this portfolio,” said Jeff Kingston, director of Asian studies at the Tokyo campus of Philadelphia’s Temple University. “He’s been hogging the mike and doesn’t know when to shut up.”
Kamei is pushing to grant small companies a moratorium on their debt payments to stave off bankruptcies, now at a six-year high.
Hirofumi Gomi, who once held Kamei’s position as Japan’s top financial regulator, said in a recent interview that forcing banks to defer debt payments may hurt them.
“Banks will ultimately end up carrying the bill for a compulsory moratorium,” Gomi, 60, said.
The Topix Banks Index has dropped 5.5 percent since Hatoyama named Kamei on Sept. 16, having at one point lost more than 10 percent.
“This policy is a disaster, at least theoretically,” said Martin Schulz, senior economist at Fujitsu Research Institute. “We’re talking about zombie companies. Just protecting these guys isn’t making Japan more productive.”
Hatoyama said Sept. 28 that “there’s no agreement on the moratorium.” The next day, Kamei told reporters the prime minister was in favor of the idea.
After graduating from the University of Tokyo, Kamei entered the National Police Agency in 1962, and then retired from the service in 1977 to enter politics. Voters in his Hiroshima district have re-elected him 10 times.
“Kamei is still quite popular,” Sophia University’s Nakano said. “His comments make a lot of people frown, but they make a lot of others happy.”
His appointment hasn’t hurt Hatoyama’s public standing. The prime minister’s approval rating stood at 71 percent in a Yomiuri Shimbun poll published Oct. 5, down only 4 percentage points from mid-September. No margin of error was given.
Hatoyama’s popularity may suffer if he can’t rein in his ministers, Nakano and Kingston said, with a risk that he gets backed into a corner and perceived as weak.
With Kamei, “what you see is what you get,” said Jesper Koll, chief executive officer of hedge fund TRJ Tantallon Research Japan. “In an age of uncertainty, he who is loudest matters.”