Japan central bank prince seen set to be named king
Reviewed By Hitoshi URABE
"Japan central bank prince seen set to be named king"
(by Yonggi Kang, Reuters) Forbes
Immediately after the captioned article, still unconfirmed at the point, was released, the government has made a formal announcement to that effect. Mr Fukui was designated as the new Governor of Bank of Japan by Mr Koizumi, to succeed Mr Hayami whose term ends next month.
Mr Fukui is a veteran of monetary affairs, having worked for Bank of Japan for forty years and had become a deputy governor, to quit the job in 1998 as a result of a scandal where BOJ officials were denounced to have favored certain market participants in exchange for lavish entertainment. He was not alleged himself of corruption but took the responsibility of administration, as he was the superior officer. Since then he was serving as the head of a private research organization, Fujitsu Research Institute.
Mr Fukui has been rumored as the candidate to succeed Mr Hayami from the early stage. He eventually became the favorite choice among the business leaders also. Major business organizations, including Nippon Keidanren, Keizai Doyukai, and Japan Chamber of Commerce all have had issued a public announcement in supports of Mr Fukui as the successor.
The talks of the new governor of BOJ have been focused on the policy of tackling deflation. Mr Fukui's rumored rival until the vary last moment for the governorship was noted for his advocacy of inflation targeting to be adopted by the central bank in order to drag Japan out of deflation. Mr Koizumi until just a couple of days ago mentioned that the nominee for the governor would need to have the ability to confront deflation. Contrary to the common notion of what is expected of a central banker in other areas and eras, Japan has been looking for a central banker who would fight vigorously fight against deflation. Mr Fukui was chosen at the end, apparently so as not to give the impression of drastic change in policy, as well as by recognizing that controlling money would require certain professional skills, in order to secure people's confidence rather than to generate anxiety at this delicate juncture.
As stated above, Mr Fukui has earned the backing of business circle, and his support from within BOJ is obvious. He is unlikely to introduce unorthodox measures abruptly, of which the anticipation has brought relief to some and disappointment to others. It is true that he has not been advocating for inflation targeting, but he has not totally ruled it out either. As Mr Fukui being a genuine professional in monetary affairs, he could adopt policy means just as effective without calling it such.
The formal nomination is subject to approval by the Diet, but all three parties of the ruling coalition has expressed basic support so not much of hassle is expected at this point in going through the procedures.
People could look forward to his leadership in coping with the confusion Japan's monetary situation is in, in parallel with the stagnating economy and ailing financial institutions. It would not be an easy job for anyone but he is for sure to be one of the very few who could still cast a beam of hope.