January 16, 2013 / 9:21 AM / in 5 years

Japan must avoid vacuum without BOJ governor: opposition leader

TOKYO (Reuters) - Japan must not allow a leadership vacuum at the Bank of Japan when its governor’s term ends in April, said the leader of Japan’s main opposition party, which delayed the appointment of a new governor at the last leadership change five years ago.

New leader of the Democratic Party of Japan (DPJ) and former trade minister Banri Kaieda speaks during a news conference after he is elected leader of the DPJ at the DPJ leadership election in Tokyo December 25, 2012. REUTERS/Toru Hanai

But Democratic Party of Japan (DPJ) leader Banri Kaieda also told Reuters on Wednesday that the next Bank of Japan (BOJ) governor should not be a mere “yes man” to the government.

BOJ Governor Masaaki Shirakawa’s term ends on April 8 and Prime Minister Shinzo Abe has said he wants the next top central banker to share his views on the drastic easy money policy the premier is advocating to escape deflation and revive the economy.

“There is one thing on which we must reflect. Last time, the BOJ governor could not be decided (for 20 days). We must not repeat that mistake,” Kaieda said in an interview.

But he added: “It is preferable that the person not be a ‘yes man’ to the government. It is important to cooperate with the government but it should be someone who doesn’t just do whatever the government says, but has appropriate knowledge and insight.”

Kaieda, 62, was elected Democratic Party leader after then-Prime Minister Yoshihiko Noda resigned following the party’s devastating defeat in a December election. The party took a mere 57 seats in the 480-member lower house, a fourth of its pre-poll presence and a sliver of the 308 seats it won when it surged to power in 2009.

The Democrats, the biggest opposition block the last time a BOJ governor’s term expired in 2008, refused to approve government candidates who had been former finance ministry officials, leading to a gap of several weeks before an appointment was made to fill the vacant position.

Approval of both houses of parliament is required for the BOJ appointment, and the ruling Liberal Democratic Party and its smaller partner lack a majority in the upper chamber, so they will need support from some opposition lawmakers.

Editing by Edmund Klamann

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