Haruhiko Kuroda will appear before parliament again even if he’s confirmed this week as Bank of Japan (8301) governor as a technicality in the nomination process means lawmakers will vote twice on his candidacy.
Kuroda will serve the remaining three weeks of Masaaki Shirakawa’s term if he’s approved, after the outgoing BOJ chief said he’d step down early on March 19. Kuroda must be confirmed again to serve for the regular five-year period beginning April 9, according to the BOJ.
Prime Minister Shinzo Abe needs opposition support to secure his nominees for the BOJ leadership as the ruling coalition lacks an upper house majority. Rejecting Kuroda after supporting him the first time carries risks for the main opposition Democratic Party of Japan, which yesterday said it reserves the right to oppose him next time.
“It’s an empty threat,” said Jun Okumura, senior adviser for the Eurasia Group in Tokyo and former trade ministry official. “There’s no reason for the DPJ to not support Kuroda again. It would be seen as nakedly partisan.”
Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo, and Robert Feldman, head of Japan economic research at Morgan Stanley MUFG Securities Co. in Tokyo, said that the second vote is a technicality.
The lower house will vote on Abe’s nominations for the BOJ leadership tomorrow, while the upper house will vote on March 15, Genichiro Sata and Mitsuhide Iwaki, ruling party lawmakers who head the steering committees for each chamber, told reporters today.
The timing of a second round of voting will be decided by parliament, according to the BOJ. Abe’s nominees for the two deputy governor positions, Kikuo Iwata and Hiroshi Nakaso, won’t face another vote.
Your Party, which has 12 lawmakers in the upper house, will oppose Kuroda for the first nomination and reconsider his candidacy based on his actions at his first policy meeting, scheduled for April 3-4, party leader Yoshimi Watanabe told reporters in Tokyo today.
The yen climbed today as a lack of unity among lawmakers on the BOJ nominees damped expectations for accelerated monetary easing. The currency was 0.5 percent higher at 95.58 per dollar as of 4:49 p.m. in Tokyo, while the Nikkei 225 Stock Average closed lower for a second day.
“I’m increasingly convinced Kuroda will go ahead with aggressive measures sooner rather than later because the market’s movements are almost wholly based on expectations,” Okumura said. “It could trigger a negative response if he doesn’t act quickly.”
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