| TOKYO, Sept 4
TOKYO, Sept 4 Japan's new welfare minister
tasked with reforming the country's $1.2 trillion pension fund
is a Harvard-educated former central banker with a sharp sense
of the reforms that markets want to see and a willingness to
buck the system.
Yasuhisa Shiozaki, 63, has a reputation as a policy wonk
with a strong resume, but critics say he has sometimes lacked
the finesse to navigate ruling party politics.
As head of the Ministry of Health, Welfare and Labor,
Shiozaki steps into a crucial role in overseeing a closely
watched overhaul of the Government Pension Investment Fund,
widely known as GPIF.
He is also under pressure to enact politically unpopular
cuts in old-age benefits to stabilise the country's welfare
"He is international and an open-minded liberal. That
doesn't means he is going to be effective," said Koichi Nakano,
a political science professor at Sophia University.
"Bureaucrats expect a minister to defend their turf."
Nakano doubted whether Shiozaki's pedigree as a former Bank
of Japan official with reform ideas would be enough to guarantee
"If it was that simple, policies would have been streamlined
Shiozaki, like many aides to Prime Minister Shinzo Abe, has
said the GPIF's portfolio is too heavily concentrated in
Japanese government bonds at some 52 percent of holdings. But
health ministry bureaucrats have urged a go-slow approach on
GPIF reform, people involved have said.
Prior to Shiozaki's appointment, sources involved in the
review of GPIF had told Reuters the fund was finalising plans to
boost the weighting of domestic stocks to more than 20 percent
from a current 12 percent target.
Shiozaki himself sounded cautious in a news conference on
Thursday, saying the priority in overhauling GPIF would be "safe
and efficient" asset management.
"It's unknown whether the message coming from Minister
Shiozaki will be accompanied by actual change," said Naka
Matsuzawa, chief rates strategist at Nomura Securities.
Shiozaki's appointment marks a comeback for a lawmaker with
a rebellious streak who joined student protests in the late
Markets have been encouraged by his past calls for reforms.
Tokyo stocks have risen to seven-month highs, while the yen has
fallen near six-year lows.
Shiozaki entered politics when he quit his job at the Bank
of Japan after around 10 years to become an aide to his father,
who was also a lawmaker. He later ran for the lower house as a
candidate in Ehime, his father's former constituency in western
That was a surprising move for a man who spent his youth in
Tokyo reading German philosopher Immanuel Kant in between
frequenting jazz clubs.
During high school, he studied for a year in California in
1968. In an interview on his website, Shiozaki says the sense of
freedom he experienced that year, in which he attended anti-war
rallies and listened to Jimi Hendrix and Pink Floyd, pushed him
towards student activism.
He was close friends with musician Ryuichi Sakamoto, who
joined him in student protests.
During his early years in politics, Shiozaki was considered
one of the LDP's rising stars, with degrees from the University
of Tokyo and Harvard's Kennedy School of Government.
But after he was appointed chief cabinet secretary in Abe's
previous government in 2006, he was criticised for being part of
Abe's "crony cabinet" and part of a clique of LDP politicians
who came from politically well-connected families.
That tenure through 2007, in which he declared war on
bureaucracy, was marked by a failure to coordinate policy as the
government was hit by scandals and gaffes.
Despite his mixed political record, however, Shiozaki's
stock rose over the past year.
As a key member of the LDP's "headquarters for Japan's
economic revitalization," he helped to draft plans to overhaul
GPIF and to bolster corporate governance and return on equity,
moves welcomed by global investors and considered some of the
highlights of "Abenomics."
Some said pressure from the Abe administration would provide
Shiozaki with the support he needs to reform GPIF.
"I think conditions are such that it would be very difficult
to undermine reforms," said Kazuhisa Kawakami, political science
professor at Meiji Gakuin University.
(Additional reporting by Linda Sieg; Editing by Simon