Wednesday, March 13, 2013
DJ: Japan Opposition Parties Approve BOJ Nominee Iwata
TOKYO--Three Japanese opposition parties on Wednesday threw their weight behind Bank of Japan deputy governor nominee Kikuo Iwata, virtually ensuring that the appointment of the outspoken critic of current central bank policies will be confirmed by parliament later this week.
With Mr. Iwata's confirmation now all but certain, Prime Minister Shinzo Abe is set to achieve his goal of installing a new team at the top of the BOJ to push through aggressive easing measures he believes are vital to overcoming Japan's long-running deflation.
"Mr. Iwata gets our OK," Yoshimi Watanabe, who heads the opposition Your Party, told reporters Wednesday. Two other minor opposition groups, the Japan Restoration Party and the New Renaissance Party, also endorsed Mr. Iwata.
Mr. Abe needs the votes of the small opposition groups to secure majority support for Mr. Iwata in the upper house. While the ruling block has a solid majority in the lower house, it lacks one in the upper chamber, where they will need 118 votes to confirm the candidates. The nominations require the approval of both houses.
The ruling Liberal Democratic Party and its coalition partner New Komeito have 102 seats combined, 16 seats short of a majority in the upper house. But the support of the three minor parties, which together have 17 seats in the chamber, provides the necessary votes for Mr. Iwata to be confirmed. Some of the five members in the upper house who vote independently of party lines have also expressed support for Mr. Iwata.
The main opposition Democratic Party of Japan has already said it will support governor nominee Haruhiko Kuroda as well as Hiroshi Nakaso, the nominee for the other deputy position, essentially ensuring their approval.
The lower house will be voting on the nominees on Thursday and the upper house on Friday, before the current BOJ leadership under Gov. Masaaki Shirakawa steps down on March 19.
The DPJ, however, has said that while it will support Mr. Kuroda this time around, it may still oppose him when he is re-nominated in April. With Mr. Shirakawa stepping down before his term expires on April 8, Mr. Kuroda will have to be re-nominated in parliament for a new five-year term after filling in for the small remainder of Mr. Shirakawa's term.
Mr. Iwata, a professor at Tokyo's Gakushuin University, is a well-known proponent of aggressive monetary policy, and has recently told parliament that the BOJ could achieve its 2% inflation target in two years. A prominent critic of the BOJ, he has called for revising the BOJ law that guarantees the central bank's independence, giving the government more say in deciding policy objectives.
Sakihito Ozawa, the Japan Restoration Party's head of parliamentary affairs and himself a longtime advocate of aggressive monetary easing, said during an interview with The Wall Street Journal on Thursday that such qualities were behind his party's endorsement of Mr. Iwata.
Mr. Ozawa said Mr. Iwata was quick to point out the harmful effects of deflation from its early stages.
"Calling deflation the biggest cause of Japan's long-running economic slump, he has since continued to make the case that monetary policy is the most effective cure for that disease," Mr. Ozawa said.