TOKYO (AFP) — A political stalemate deepened Tuesday a day before Japan's central bank chief steps down amidst a global credit crisis as the opposition signalled its resistance to the government's latest nominee.
The government proposed Koji Tanami, head of Japan's development lending agency, but the opposition said it would be hard to approve the candidate given his background as a former top finance ministry bureaucrat.
The opposition has already rejected one former finance ministry heavyweight, Bank of Japan deputy Toshiro Muto, because of concerns he is too close to the government to defend the independence of the central bank.
"We're disappointed. In theory it's impossible to agree to Mr Tanami while turning down Mr Muto," Kenji Yamaoka, parliamentary affairs chief of the main opposition Democratic Party, told reporters.
The government has repeatedly pressured the central bank not to raise Japan's interest rates, which at 0.5 percent remain the lowest among major economies.
Tanami said Tuesday he would strive to protect the central bank's autonomy if appointed, which would require the approval of both houses of parliament, one of which is controlled by the opposition.
"If I were offered an opportunity to assume the important post of BoJ governor, I would do my utmost to have an appropriate monetary policy while securing independence and transparency," he told a parliamentary hearing.
"I believe that the Japanese economy has the strength to keep growing despite the global economic slowdown, although it has the challenge of a shrinking population," he said.
The government also nominated Kiyohiko Nishimura, a professor who sits on the BoJ monetary policy board, as one of the two deputy governors.
Prime Minister Yasuo Fukuda is scrambling to avoid a vacancy at the head of the Bank of Japan at a time when the world's top central banks are acting to try to ease strains on the financial system.
The BoJ on Tuesday injected 4.1 billion dollars of funds into the domestic banking system for a second consecutive day.
But no clear successor was in sight a day before governor Toshihiko Fukui steps down after a five-year tenure, during which he is credited with helping the world's second-largest economy to recover from a decade in the deflation doldrums.
The ruling Liberal Democratic Party (LDP) "seems to be losing the political battle over this appointment," noted Macquarie Securities economist Richard Jerram.
"The DPJ has managed to dodge potential criticism for the risk of leaving the position of BoJ governor vacant, which in turn has forced the LDP to scramble to try to find an acceptable candidate," he added.
Takashi Sasagawa, a senior lawmaker of the ruling Liberal Democratic Party, earlier derided the opposition for not giving Tanami a chance.
"It's unreasonable to say he's good or no good even before meeting him or listening to him," Sasagawa said.
Top DPJ leader Ichiro Ozawa criticised the government for waiting until the last minute to propose a candidate that it knew would be unacceptable to his party.
"The LDP should have been aware of the opposition's position. To not make a proposal until the very last minute and then telling us to swallow it whole ... is too coercive," he told reporters.
So far only Masaaki Shirakawa, a former BoJ executive director, has been approved by parliament as a new deputy governor. If the row over the central bank governor is not resolved in time, he could take charge temporarily.
The opposition won a landmark election victory last year, taking control of the upper house, in a backlash against the government after a string of mishaps.
A poll released on Tuesday by the top-selling Yomiuri newspaper put approval of Fukuda's nearly six-month-old government at its worst yet level of 33.9 percent.
kh-mis-oh-kdf/dr/sct/lh
Copyright © 2009 AFP. All rights reserved. More »
