Aso Says Next BOJ Chief Doesn’t Have to Be From Finance Ministry

Japanese Finance Minister Taro Aso said that the next governor of the Bank of Japan doesn’t have to be someone with a finance ministry background, after an opposition party said it wouldn’t support such a candidate.

“They don’t have to be from the Ministry of Finance as long as close communications are maintained,” Aso told reporters in Tokyo today. He reiterated that the candidate should have good foreign language skills and experience of managing a large organization.

Investors are assessing the BOJ’s commitment to further easing to meet a 2 percent inflation target as Prime Minister Shinzo Abe prepares to nominate a new central bank chief next week. His choice must be approved by the upper house of parliament where the ruling Liberal Democratic Party lacks a majority, giving sway to opposition parties.

The yen was 0.2 percent lower at 93.28 per dollar at 1:45 p.m. in Tokyo.

Your Party leader Yoshimi Watanabe said in an interview on Feb. 14 that Asian Development Bank President Haruhiko Kuroda and former BOJ Deputy Governor Toshiro Muto are unacceptable choices to succeed Masaaki Shirakawa as central bank governor because they are both former Ministry of Finance bureaucrats.

“If this becomes a situation of ‘MOF sets currency policy so the BOJ should keep its mouth shut,’ then there’s a fear the BOJ won’t carry out bold monetary easing,” said Watanabe, whose party has 12 legislators in the 242-seat upper chamber.

Watanabe told reporters today that he hopes the next BOJ governor and two deputy governors are reflationists from outside the government.

Abe will decide his nominee for a successor to Shirakawa next week, once he returns from meeting President Barack Obama in Washington, Chief Cabinet Secretary Yoshihide Suga told reporters on Feb. 19 in Tokyo. Shirakawa and his two deputies will step down on Mar. 19.

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