Japan MOF’s Nakao Nominated to Replace Kuroda at ADBMayumi Otsuma
Japan will nominate its top currency official, Takehiko Nakao, to head the Asian Development Bank as Haruhiko Kuroda prepares to step down to lead the Bank of Japan.
Nakao has “extensive experience in international finance and development,” Finance Minister Taro Aso said in a statement today in Tokyo. The vice finance minister is “the most qualified candidate,” he said.
Aso didn’t say who would replace Nakao. The previous two appointments were promotions of heads of the ministry’s international bureau -- currently Tatsuo Yamasaki, 55. Mitsuhiro Furusawa, 57, head of the financial bureau and a former International Monetary Fund official, may replace Nakao, the Sankei newspaper said Feb. 26 without citing anyone.
Japan has held the presidency of the Manila-based ADB since the institution was founded in 1966, and is tied with the U.S. in having the largest voting power at the development bank. China lacks sufficient support to grab the role and Japan can retain its hold, said Masahiro Kawai, dean of the Tokyo-based Asian Development Bank Institute, in an interview in January.
“Japan wants a Japanese person at the top of the ADB to maintain a level of global influence,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former central bank official. “There won’t be any change in Japan’s currency policy when Nakao is replaced at MOF.”
Japanese Prime Minister Shinzo Abe nominated Kuroda, who has led the ADB since 2005, as central bank governor last week. Current BOJ Governor Masaaki Shirakawa steps down on March 19.
Nakao, 57, 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 has fallen about 12 percent in the past three months on investors’ expectations for more aggressive monetary easing to counter deflation. It traded at 94.03 as of 10:56 a.m. in Tokyo today.
In a statement today, Nakao said he will ensure the ADB is backed by sufficient financial resources if confirmed as president.
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.”
Kuroda, 68, is a predecessor of Nakao in the vice finance minister job, directing Japan’s currency policy from 1999 to 2003.