Main Japan Opposition Says BOJ Independence Key for Next Chief

The next Bank of Japan governor must be someone who can protect its independence, an executive of the biggest opposition party said, a sign that Prime Minister Shinzo Abe may face resistance in getting his nominee through the Diet.

“The BOJ’s independence must be guaranteed,” Mitsuru Sakurai, policy chief for the Democratic Party of Japan, said in an interview yesterday. “We need someone who can do that.”

Governor Masaaki Shirakawa’s term ends in April and two deputies step down in March, with Abe seeking candidates who will enact “bold” monetary easing to overcome more than a decade of deflation. Abe needs opposition support to ensure any nominee’s passage through the Diet’s upper house, where his Liberal Democratic Party lacks a majority.

The DPJ, which lost power to the LDP in December’s lower house election, remains the biggest party in the upper chamber. Sakurai, who served as deputy finance minister during Prime Minister Naoto Kan’s administration, said the new governor must possess management skills, be able to cooperate with the government, and be able to communicate with the markets. He declined to say whether a former Ministry of Finance bureaucrat would be an acceptable choice.

Abe last week hailed as “epoch-making” a joint statement between the government and the BOJ that set a 2 percent inflation target while holding off on fresh stimulus to achieve it until next year. He is seeking a governor who shares his views on policy and who has global communication skills, he said yesterday in an interview broadcast by Nihon TV.

While Yoshimi Watanabe, head of the small opposition Your Party, said in an interview this month that former BOJ bureaucrats should not be considered for the post, Abe said that experience in the bureaucracy would not exclude anyone.

Potential candidates floated by lawmakers and economists include former economy minister Heizo Takenaka, Asian Development Bank President Haruhiko Kuroda and former deputy BOJ governor Kazumasa Iwata.

Before it's here, it's on the Bloomberg Terminal.