|
Tokyo: Japan's main opposition party rejected the government's pick to run the central bank of the world's second-largest economy yesterday, despite the nominee's pledge at parliamentary hearings to act independently in the job.
The row over whether Toshiro Muto should head the Bank of Japan (BoJ) raises the risk of a monetary policy vacuum in the midst of a global credit crisis, with current governor Toshihiko Fukui due to retire next week.
Executives of the main opposition Democratic Party met after the hearings and confirmed they would oppose Muto, currently a deputy BoJ governor who was put forward by the government.
"It cannot ensure the BoJ's independence," Yukio Hatoyama, the Dem-ocrats' secretary general, told reporters in explaining the rejection of Muto. "We are not opposing Muto just because he is a career finance ministry official, although he is dubbed Mr Finance Ministry."
Of the two nominees as deputy governors, the Democrats rejected academic Takatoshi Ito but accepted retired central bank official Masaaki Shirakawa.
That raises the possibility that Shirakawa could be confirmed in his job in time to take over as acting governor when Fukui retires on March 19 - although economists say a temporary central bank head would be unlikely to make long-term decisions at a time when the world faces fears of a recession in the United States, and possibly Japan.
Government links
Opposition parties, led by the Democrats, have consistently opposed Muto because of his close ties to government. His candidacy is expected to be rejected formally in a vote scheduled in the upper house today by opposition lawmakers. They control the upper house, giving power to veto the appointment.
Some Cabinet ministers said earlier the government would renominate Muto if he was rejected but Prime Minister Yasuo Fukuda declined to outline the next step. "I'm puzzled as to what to do as I don't know the reason why the Democrats opposed him," Fukuda told reporters.
Muto told parliament of rising economic risks in comments that echoed the government's argument that its nominees for the posts of governor and two deputies should be confirmed without delay as fears grow for the US economy.
"Japan's economy is at a critical stage as it faces various risks at home and abroad," Muto said. "Signs of a US economic slowdown are intensifying and downside risks for the global economy are rising. I would strive to gain the public's trust and ensure the BoJ's independence," he said.
|
