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Thursday, March 20, 2008
Fukui's term ends on sour note
Exiting BOJ chief ends five-year stint with jab at DPJ
What would have been a cheerful sayonara news conference Wednesday evening for departing BOJ Gov. Toshihiko Fukui instead turned into an uncomfortable interrogation as he was peppered with questions about the Diet's failure to endorse his successor.
"It is regrettable," said Fukui, whose five-year term ended Wednesday. "It is unheard of in the (BOJ's) history that a successor has not been appointed" by the end of the departing governor's term.
Fukui emphasized that a key factor in choosing the next BOJ chief should be whether the candidate is determined to stabilize the yen, not where the nominee once worked.
Other desirable characteristics include a mind-set that puts priority on the market, a global perspective, and the ability to run the Policy Board in a democratic manner, Fukui said.
"If there is someone who can do all of this, it does not matter where the person is from," Fukui said.
The remark was seen as an apparent jab at the Democratic Party of Japan, which has rejected two government nominees in a row — Deputy BOJ Gov. Toshiro Muto and Japan Bank for International Cooperation Gov. Koji Tanami — on grounds that their past experience as top Finance Ministry bureaucrats could jeopardize the BOJ's independence in formulating monetary policy.
But Fukui refrained from commenting directly on the political gridlock that led to the leadership vacancy at the central bank.
Fukui said he appointed former BOJ executive Masaaki Shirakawa, who was endorsed last week as one of the two new BOJ deputies, to serve as acting BOJ governor until someone gets the green light from the Diet.
Article 22 of the BOJ Law stipulates that the deputy governor will perform the duties of governor if that post is vacant. The other deputy governor, Kiyohiko Nishimura, was approved by the Diet earlier in the day and would become acting governor if Shirakawa is not up to the task.
"It is doubtful for any organization without a leader to produce a good performance on a long-term basis," Fukui said. "The organization will have to shoulder an additional burden."
Fukui denied the government sounded him out about staying on beyond Wednesday. The ruling coalition reportedly asked the DPJ about retaining Fukui during the stalemate, but the opposition party rejected the proposal.
Reflecting on his years as central bank chief, Fukui recalled taking office five years ago at a time when Japan was mired in deflation with no prospects for recovery.
"It was the day the Iraq War started and I began working in a state of emergency," he said. "I was too scared to even think about whether we could ever end the quantitative easing policy."