Japan Considers MOF Currency Head Nakao for ADB PresidencyToru Fujioka
Japan is considering Takehiko Nakao, the nation’s top currency official, as a candidate to lead the Asian Development Bank under the assumption that current ADB head Haruhiko Kuroda becomes the next Bank of Japan governor.
“There will be an election to decide the presidency of the Asian Development Bank, so we have to campaign for Japan to win that position,” Finance Minister Taro Aso told reporters in Tokyo today. “There are various candidates but he is probably one of them,” Aso said, when asked if Vice Finance Minister for International Affairs Nakao should take the position.
Japan has held the presidency of the Manila-based ADB since the institution was founded in 1966, and is tied with the U.S. as having the largest voting power at the development bank. The U.S. has monopolized the leadership of the World Bank, while Europeans historically have chosen the head of the International Monetary Fund.
“Japan and the U.S. are still the largest shareholders and the U.S. has no intention to assume the presidency of the ADB,” Masahiro Kawai, dean of the Tokyo-based Asian Development Bank Institute, said in an interview last month. China, Asia’s largest economy, lacks sufficient support to grab the role and Japan can retain its hold, Kawai said.
Kuroda, 68, is a predecessor of Nakao in the vice finance minister job, directing Japan’s currency policy from 1999 to 2003. Japanese Prime Minister Shinzo Abe is likely to nominate Kuroda as central bank governor this week, according to two officials with knowledge of the discussions who asked not to be named as the talks are private.
Nakao, 56, oversaw the government’s biggest-ever one-day currency-market intervention on Oct. 31, 2011, after the yen reached a postwar high of 75.35 per dollar.
The currency official, who joined the finance ministry in 1978 and has an MBA from the University of California, Berkeley, is the author of a 2008 book, “America’s Economic Policy: Can it Sustain its Strength?” In 2010 he said the stability of the international financial system is premised on the U.S dollar as a “key currency.”
The yen yesterday reached its lowest level against the dollar since May 2010 on prospects for more monetary stimulus from Japan’s central bank under Kuroda. It later rallied amid haven demand stemming from concern Italy’s election failed to produce a majority winner. It was at 92.52 as of 11:43 a.m. in Tokyo.
The Chinese, Australian and South Korean finance ministries declined to comment on Nakao’s potential candidacy.