Lacking Governing Vision, Japan’s Opposition Offers Obstructionism

Lacking Governing Vision, Japan’s Opposition Offers Obstructionism

TOKYO -- With stock markets around the world in turmoil, a rapidly appreciating currency, millions of pension records lost and signs the Japanese economy is slowing, now hardly seems a propitious time to have a vacancy at the head of the central bank of the world's second largest economy.

Yet Japan's main opposition Democratic Party of Japan apparently begs to differ. Last Wednesday, the opposition-dominated upper house of the Diet rejected the ruling Liberal Democratic Party's second nominee, Japan Bank of International Cooperation Gov. Koji Tanami, to replace outgoing Bank of Japan chief Toshihiko Fukui, whose term expired the same day. The move followed the upper house rejection the previous week of Bank of Japan Deputy Gov. Toshiro Muto, and means that a temporary governor has now been appointed, leaving the top post vacant for the first time since the end of World War II.

The DPJ claims that both Tanami and Fukui were rejected because they were former finance ministry bureaucrats, and that their independence was therefore in doubt. Tanami had offered reassurances that he would try to uphold the bank's independence, something that was made easier by 1998 revisions to the Bank of Japan Law, which strengthened its autonomy and increased transparency, including by introducing a rule that the governor can only be dismissed because of illness or related reasons.

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