TOKYO (AFP) — Japan's two major parties said Friday they wanted an embarrassing vacancy at the helm of the central bank to be filled soon but traded blame on who was responsible.
Despite global financial turmoil, the two sides failed to agree on a name before governor Toshihiko Fukui's five-year term ran out Wednesday, with the opposition saying government nominees were too close to the finance ministry.
"The period of vacancy at the Bank of Japan governor's post has to be the minimum possible as global financial markets continue to be unstable," Finance Minister Fukushiro Nukaga told reporters.
Before bowing out, Fukui tapped one of the two new deputies, Masaaki Shirakawa, to take the helm until a permanent replacement could be found.
Shirakawa said Friday that tackling financial market turmoil sparked by US credit problems was his number one task.
"The top priority is to appropriately handle the nervous climate in the global financial market triggered by the subprime loan issue," he told a press conference.
Global markets have been shaken recently by growing credit problems sparked by a wave of defaults on US subprime, or high-risk, mortgages. Earlier this week Japanese share prices slumped to a 31-month low as the yen hit a 12-year high.
Shirakawa, a professor who formerly worked at the central bank's New York office, said he would try to minimise the impact of the vacancy at the Bank of Japan (BoJ).
"It is abnormal that there is no governor. But there is no break in the economy and finance," he said. "We want to work hard so that we can avoid (negatively) impacting the Japanese and global economy and finance."
Meanwhile, the political row continued over the leadership vacuum.
Prime Minister Yasuo Fukuda on Thursday lashed out at the main opposition Democratic Party of Japan (DPJ), saying it relished its veto power and did not come forward with its own names.
Yukio Hatoyama, secretary general of the DPJ, fired back on Friday, saying Fukuda's argument was "wide of the mark."
"I would like to say to Prime Minister Fukuda -- stop passing the responsibility and submit a new personnel proposal as soon as possible," Hatoyama told reporters.
Jiji Press reported that the government is aiming to have a central bank chief in place before the next policy board meeting from April 8 to 9.
The opposition voted down two names proposed by Fukuda's government due to worries they might not preserve the independence of the central bank due to close ties with the finance ministry.
The government has repeatedly pressured the BoJ not to raise interest rates, which at 0.5 percent are the lowest among the world's major economies.
"We seriously examined the proposed candidates. But one was a person who was squarely opposed to the central bank's independence when he was an official at the finance ministry," Hatoyama said.
"And the other was one who took totally wrong policies concerning the disposal of bad-performing loans when he was in the finance ministry. Both of them are amateurs in terms of international finance," he said.
Top government spokesman Nobutaka Machimura said Shirakawa might have to attend next month's talks in Washington between the Group of Seven major economies' finance chiefs "if the next governor is not appointed at that point."
Hiroko Ota, the minister for economic and fiscal policy, called the impasse "very regrettable" but said she doubted it would have a major impact on the economy.
The benchmark Nikkei stock index rose nearly two percent this week despite the showdown over the BoJ, with dealers in Tokyo focusing largely on leads from the troubled US economy.
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