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Shirakawa to be nominated for vacant Bank of Japan Governor post?

Yes, the Bank of Japan still has no Governor, and the next G7 meeting of finance ministers and central bankers kicks off on April 11, just over a month from now. The Nikkei is now speculating that a third candidate for the governorship may be nominated as early as tomorrow, though it could happen next Monday. If this schedule is followed, the new BOJ Governor could be fully approved by the middle of next week.

Interestingly, the Nikkei also speculates that Deputy Governor (and acting governor) Masaaki Shirakawa could be the nominee. This would be an interesting about-face for the ruling Liberal Democratic Party, who just over a week ago was dismissed by the ruling camp as a candidate on the grounds that it would be “inappropriate” to elevate someone who had just been handed the Deputy Governor position to the head of the bank.

Of course, it’s not inappropriate at all, and Shirakawa would be a very strong candidate. It’s difficult to imagine the opposition Democratic Party of Japan not approving him, especially when he was approved for the deputy position and his name has been publicly raised as a potential candidate by DPJ members.

For further reading on the political impact of this entire debacle, Glocom’s BOJ Fiasco Reveals Painful Truths about Politics in Japan is a recommended read. One passage that I thought was dead-on correct in its analysis was this:

The main question is why few, not least of which the media, have ever raised the issue or imagined what might happen until it became a troubling reality. Herein lies the problem of the Japanese political system, and democracy, which have been exercised on the almost unquestioned assumption that the Liberal Democratic Party’s rule would be unending. That is why, when the new Bank of Japan Law was put in place, nobody was imaginative enough to conceive the divided parliament that has since come to fruition.

For a more in-depth look at DPJ leader Ichiro Ozawa and the motivations behind his drive to oppose the LDP, the always excellent Tobias Harris’ recent Will the real Ozawa please stand up? is a must-read.

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