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Power vacuum at the Bank of Japan

Latest update : 2008-03-18

Japan's opposition-led upper house on Tuesday rejected the appointment of former finance ministry bureaucrat Koji Tanami to lead the Bank of Japan, just one day before the bank's current governor Toshihiko Fukui is due to step down.

Japan's opposition on Tuesday rejected the government's pick of former finance ministry bureaucrat Koji Tanami to take over as central bank chief this week, a senior lawmaker said.
"The conclusion is that we cannot accept him," opposition lawmaker Yoshito Sengoku told reporters at the parliament.
Bank of Japan governor Toshihiko Fukui's five-year term runs out Wednesday at a time of turmoil on global markets due to concern over the US economy.
"Systematic risks are spreading around the world without end. As this is coming right before a potential crisis, we just can't get rid of questions about his ability," Sengoku said.
Tanami, who now heads the Japan Bank for International Cooperation, the government's main development lending body, was formerly the vice finance minister, or the ministry's top bureaucrat.
The opposition already voted down the government's first choice of Toshiro Muto, currently the Bank of Japan's number two, because he held the same position at the finance ministry.
"We have no choice but to be critical against the Fukuda government's obsession with former vice finance ministers," Sengoku said.
The opposition argues that people entrenched in the finance ministry bureaucracy are unlikely to preserve the independence of the central bank, which has often faced government pressure to keep interest rates low.

Date created : 2008-03-18