Alexa
  • Directory of Taiwan

Japan postpones nomination of new central bank governor

Japan postpones nomination of new central bank governor

Japan postponed the nomination of a new central bank governor for at least the second time, indicating that the government can't reach agreement with the opposition Democratic Party of Japan.
The government yesterday postponed announcing its nominee until next week, Nikkei and Asahi newspapers reported, citing unidentified government officials. The ruling Liberal Democratic Party-led coalition intended to nominate Toshiro Muto as Bank of Japan Governor this week, LDP lawmakers, who spoke February 22 on the condition they not be identified, said in an interview.
The delay increases the risk of a leadership vacuum at the Bank of Japan after the current governor's term expires March 19, at a time when the economy may be slowing and inflation is accelerating.
It also demonstrates how the opposition is using its control of the upper house of parliament to create problems for Prime Minister Yasuo Fukuda, whose public support is falling.
"The DPJ has been desperately looking for a new issue to bring down the government and force new elections," Richard Katz, editor in chief of the New York-based Oriental Economist Report and author of two books on Japan's economy, said.
In an interview with Bloomberg Television yesterday, DPJ Secretary General Yukio Hatoyama hinted that there was discord within the opposition over whether to support the nomination of Muto or former BOJ deputy governor Yutaka Yamaguchi.
BOJ independence
"It's a fact that some DPJ members who are familiar with monetary policy support Yamaguchi," Hatoyama said. Muto's nomination has been criticized by DPJ officials because he previously held posts in Japan's finance ministry, which they say will threaten the central bank's independence.
At the same time, Hatoyama said, the party's leaders don't want the public to blame them for preventing the government from replacing Bank of Japan Governor Toshihiko Fukui after his term expires.
"We want to avoid a situation where the BOJ governor position becomes vacant because of us," he said. "That would make criticism of the DPJ grow stronger."
The government cut its economic assessment for the first time in 15 months on February 22, saying Japan's longest postwar expansion will slow as exports and production cool.
Meanwhile companies and households are grappling with record costs of oil, wheat and soybeans. Consumer prices rose at the fastest pace in more than nine years in December.
Approval rating
Fukuda's approval rating fell below 30 percent for the first time according to a newspaper survey published yesterday. The poll was taken after a public outcry over the government's slow response to tainted food imports from China and a navy ship's collision with a fishing boat.
Fukuda's approval rating fell to 28.7 percent in the latest Sankei newspaper survey, down 7.9 points from last month, with his disapproval level rising 4.9 points to 52.2 percent. The newspaper took the survey by telephone on February 23 and 24 jointly with Fuji News Network and obtained 1,000 responses. The newspaper didn't provide a margin of error.
Fukuda's falling popularity is unlikely to topple his administration because the DPJ has failed to present an alternative, Koichi Nakano, a professor of political science at Sophia University in Tokyo, said in a telephone interview.
The LDP will probably continue to back Fukuda at least until Japan hosts the G8 summit of most industrialized nations in July. Party members hope that hosting world leaders will boost Fukuda's stature among Japanese voters, Nakano said.


Updated : 2021-05-18 03:00 GMT+08:00