By Bernama
Tokyo : Executives of the main opposition Democratic Party of Japan decided Tuesday to reject the government’s nomination of Hiroshi Watanabe for the post of deputy governor of the Bank of Japan, even though some of the party’s lawmakers indicated earlier that the nomination would be approved, Japan’s Kyodo news agency reported.
But the DPJ leadership did decide to endorse the proposed promotion of BOJ Deputy Governor Masaaki Shirakawa to governor, party lawmakers said.
DPJ Secretary General Yukio Hatoyama told reporters the party made the decision to reject Watanabe because it opposes the so-called ”amakudari” practice in which senior bureaucrats assume post-retirement jobs at entities related to the sectors they formerly oversaw.
The decision came despite indications from some members of the DPJ that a party panel had approved in principle the nomination of Watanabe, a former vice finance minister for international affairs.
Earlier in the day, Yoshito Sengoku, the head of the panel, said that Shirakawa and Watanabe had made a ”good impression” when they appeared at Diet hearings.
But DPJ leader Ichiro Ozawa has expressed opposition to Watanabe’s nomination because of his background as a Finance Ministry bureaucrat.
Finance Minister Fukushiro Nukaga expressed disappointment at the DPJ’s decision, saying, ”Why didn’t it endorse this talented person” Nukaga said he thought Watanabe would be well suited to the job at a time of global financial turbulence.
A senior Liberal Democratic Party lawmaker criticised the DPJ for failing to endorse Watanabe as a party despite the expressed approval of many party members.
Shirakawa, currently acting BOJ governor, underlined the need for the central bank to act quickly to fill the vacant position of governor at a Diet hearing, pledging to exert leadership.
Speaking to the House of Representatives steering committee, Shirakawa described the current situation in which the governor’s chair is empty as ”exceptional” and said the issue must be resolved swiftly, adding, “I would dedicate myself to carrying out the job.”
Also joining the hearing at the lower house panel, Watanabe, currently a professor at Hitotsubashi University in Tokyo, said it is essential for the BOJ to cooperate closely with central banks in other major economies given the recent global financial turmoil.
“I hope to contribute to the stability of international financial markets,” he said.
The DPJ led the upper house to reject two earlier nominees for the governor’s post last month.
Shirakawa and Watanabe also spoke before a hearing at the House of Councillors, the opposition-controlled upper house, in the afternoon.
Watanabe stressed the importance of the central bank’s ”independence and transparency.
Shirakawa echoed that view, saying that central banks must defend their independence but adding they should never fall into ”self-righteousness.”
On Monday, the government of Prime Minister Yasuo Fukuda fielded Shirakawa and Watanabe in a last-ditch effort to prevent Japan being left without a central bank chief to represent it at the upcoming Group of Seven meeting in Washington.
The two Diet chambers are scheduled to vote on the nominations Wednesday.
The appointments of the BOJ governor and his two deputies require the approval of both houses of the Diet.
The central bank’s top post has been vacant since Toshihiko Fukui’s five-year term as BOJ chief expired March 19.
Former University of Tokyo professor Kiyohiko Nishimura has held the other deputy governor post since March 20.
The DPJ rejected the two earlier nominees for governor — Toshiro Muto, a former BOJ deputy governor, and Koji Tanami, governor of the Japan Bank for International Cooperation — arguing their career backgrounds as former vice finance ministers could hurt the BOJ’s independence as a central bank in determining monetary policy.
The lower house, where the ruling coalition led by Fukuda’s LDP holds a majority, approved both Muto and Tanami.
The DPJ was widely expected to endorse Shirakawa’s promotion because it endorsed his nomination for the post of deputy governor last month.
But it had been unclear whether the DPJ would accept Watanabe as a deputy chief as he is also from the Finance Ministry, though he did not assume the post of top bureaucrat at the ministry like Muto and Tanami.
The political wrangling over the selection of the next BOJ chief comes before finance ministers and central bank chiefs from major industrialised economies meet in Washington on Friday to discuss the recent global financial turmoil and to confirm their collaboration to help resolve the U. S. subprime mortgage crisis.
The meeting also provides an occasion for a frank exchange of views between the financial chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States.
Experts say the absence of a BOJ governor at the meeting could damage Japan’s reputation.