Japanese Lawmakers Approve Acting Governor As Bank of Japan Chief; Key Rate Unchanged.
Japanese lawmakers endorsed acting Bank of Japan chief Masaaki Shirakawa as its new governor Wednesday, ending a power vacuum at the central bank's helm by approving the government's third candidate for the job.
But the opposition-controlled upper house of parliament rejected a former Finance Ministry bureaucrat as one of the central bank's deputy governors, prolonging a dispute that has turned into a major embarrassment for the scandal-battered administration of Prime Minister Yasuo Fukuda.
The struggle over the bank's leadership could turn into a liability amid the growing worries over a global economic slowdown, soaring fuel and commodity prices, volatile stock markets and the credit crisis in the U.S., Japan's major export partner.
The stalemate over who should head the Bank of Japan festered for weeks as the opposition turned the decision into a political issue. The five-year term of former Bank of Japan chief Toshihiko Fukui expired March 19.
The opposition, led by the Democratic Party of Japan, said former bureaucrats at the powerful Finance Ministry were too politically connected and could endanger the independence of the central bank of the world's second-largest economy. The Democrats led the upper house to vote down two previous candidates for the top job for that reason.
In the latest balloting, shown live on the Internet, the upper house approved Shirakawa to take the bank governorship 231-7. It voted down nominee Hiroshi Watanabe 121-115 as one of two deputy governors.
Fukuda pleaded with the opposition in a parliamentary session to drop its objection to Watanabe. He denied his appointment was "amakudari," or "descent from heaven," referring to the doling out of plum jobs to former government employees, especially after retirement.
"We made a proposal which I thought was the best choice," he told lawmakers. "Is it so bad for a former bureaucrat to win a post, if that person happens to be best suited for the job? Are we going to become a nation that can't use its talent?"
Nominations for bank posts need approval from both houses of parliament. Watanabe, former vice finance minister for international affairs, was knocked out of the running by his rejection in the upper house.
Ichiro Ozawa, who leads the Democrats, said the opposition is against the status-quo system that gives privileges to such bureaucrats. "That is the biggest cause of corruption in bureaucracy," he said in the parliamentary session, broadcast live on national television.
The ruling coalition controls the lower house. Shirakawa, appointed by the prime minister, easily gained approval there. The vacancies at the central bank are the latest troubles for Fukuda, who has seen his approval ratings sag over a number of scandals, including millions of missing pension records and a criminal investigation of several defense officials.
The government had been eager to resolve the bank dispute before a Group of Seven financial chiefs' meeting Friday in Washington, D.C., so Japan will have a governor to send to the meeting. The top government spokesman said he was unhappy with the battle over the deputy. "We can't come up with an alternative so quickly, so it's inevitable the deputy's post will be vacant for a while," Chief Cabinet Secretary Nobutaka Machimura said on nationally televised news.
Separately, the Bank of Japan kept its key interest rate steady at 0.5 percent at a monthly policy board meeting. It was the first such meeting in modern Japanese history without a full-time bank governor. The board voted unanimously to keep the rate unchanged.
The bank sent a cautionary note in a monthly report, saying that soaring energy and material costs were hurting the economy, which was slowing down. In earlier reports, the Bank of Japan had said that the economy was expanding at a moderate pace. The wording was changed in the just-issued report to say the bank now expected the economy to grow at a slower pace, and grow moderately after that.
In a lower house hearing Tuesday, Shirakawa said he would maintain the bank's independence and transparency. "The vacancy of the governor post is clearly an abnormal situation that must be resolved urgently," said Shirakawa, whose nomination as a deputy governor was approved by lawmakers last month. "I'm determined to devote my heart and soul to fulfill the duty as governor if I can only get your approval," he said.
Japanese lawmakers endorsed acting Bank of Japan chief Masaaki Shirakawa as its new governor Wednesday, ending a power vacuum at the central bank's helm by approving the government's third candidate for the job.
But the opposition-controlled upper house of parliament rejected a former Finance Ministry bureaucrat as one of the central bank's deputy governors, prolonging a dispute that has turned into a major embarrassment for the scandal-battered administration of Prime Minister Yasuo Fukuda.
The struggle over the bank's leadership could turn into a liability amid the growing worries over a global economic slowdown, soaring fuel and commodity prices, volatile stock markets and the credit crisis in the U.S., Japan's major export partner.
The stalemate over who should head the Bank of Japan festered for weeks as the opposition turned the decision into a political issue. The five-year term of former Bank of Japan chief Toshihiko Fukui expired March 19.
The opposition, led by the Democratic Party of Japan, said former bureaucrats at the powerful Finance Ministry were too politically connected and could endanger the independence of the central bank of the world's second-largest economy. The Democrats led the upper house to vote down two previous candidates for the top job for that reason.
In the latest balloting, shown live on the Internet, the upper house approved Shirakawa to take the bank governorship 231-7. It voted down nominee Hiroshi Watanabe 121-115 as one of two deputy governors.
Fukuda pleaded with the opposition in a parliamentary session to drop its objection to Watanabe. He denied his appointment was "amakudari," or "descent from heaven," referring to the doling out of plum jobs to former government employees, especially after retirement.
"We made a proposal which I thought was the best choice," he told lawmakers. "Is it so bad for a former bureaucrat to win a post, if that person happens to be best suited for the job? Are we going to become a nation that can't use its talent?"
Nominations for bank posts need approval from both houses of parliament. Watanabe, former vice finance minister for international affairs, was knocked out of the running by his rejection in the upper house.
Ichiro Ozawa, who leads the Democrats, said the opposition is against the status-quo system that gives privileges to such bureaucrats. "That is the biggest cause of corruption in bureaucracy," he said in the parliamentary session, broadcast live on national television.
The ruling coalition controls the lower house. Shirakawa, appointed by the prime minister, easily gained approval there. The vacancies at the central bank are the latest troubles for Fukuda, who has seen his approval ratings sag over a number of scandals, including millions of missing pension records and a criminal investigation of several defense officials.
The government had been eager to resolve the bank dispute before a Group of Seven financial chiefs' meeting Friday in Washington, D.C., so Japan will have a governor to send to the meeting. The top government spokesman said he was unhappy with the battle over the deputy. "We can't come up with an alternative so quickly, so it's inevitable the deputy's post will be vacant for a while," Chief Cabinet Secretary Nobutaka Machimura said on nationally televised news.
Separately, the Bank of Japan kept its key interest rate steady at 0.5 percent at a monthly policy board meeting. It was the first such meeting in modern Japanese history without a full-time bank governor. The board voted unanimously to keep the rate unchanged.
The bank sent a cautionary note in a monthly report, saying that soaring energy and material costs were hurting the economy, which was slowing down. In earlier reports, the Bank of Japan had said that the economy was expanding at a moderate pace. The wording was changed in the just-issued report to say the bank now expected the economy to grow at a slower pace, and grow moderately after that.
In a lower house hearing Tuesday, Shirakawa said he would maintain the bank's independence and transparency. "The vacancy of the governor post is clearly an abnormal situation that must be resolved urgently," said Shirakawa, whose nomination as a deputy governor was approved by lawmakers last month. "I'm determined to devote my heart and soul to fulfill the duty as governor if I can only get your approval," he said.
1 comment:
Post a Comment