TOKYO (Reuters) - Japan must not create a leadership vacuum at the Bank of Japan when its governor’s term ends in April, the head of the main opposition party said, suggesting the party would not delay the appointment as it did five years ago as a political tactic.
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.
Kaieda, 62, was elected DPJ leader after then-Prime Minister Yoshihiko Noda resigned following the party’s massive defeat in a December election that propelled Prime Minister Shinzo Abe’s long-dominant Liberal Democratic Party (LDP) back to power after a three-year hiatus. The Democrats are now struggling to regroup, but face an uphill battle to regain voter trust.
BOJ Governor Masaaki Shirakawa’s term ends on April 8 and Abe wants the next central banker to share his views on the need for a drastic easing of monetary policy 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 at a party headquarters near parliament, now devoid of the office’s hustle-bustle of the party’s heydey in power.
“It is preferable that the person not be a ‘yes man’ to the government,” he added. “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.”
The Democrats, the biggest opposition bloc the last time a BOJ governor’s term expired in 2008, refused to approve government candidates who had been former finance ministry officials. That lead to a gap of several weeks before an appointment was made to fill the vacant position.
Approval by 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.
The DPJ took 57 seats in the December 16 poll for the 480-member lower house, a quarter of its pre-election presence and a sliver of the 308 seats it won when it surged to power in 2009 for the first time.
Kaieda, a former trade minister in charge of energy policy when the 2011 Fukushima nuclear crisis hit, must first rally his demoralized and decimated party ahead of a July election for half the seats in the 242-member upper house, where the DPJ is the biggest party but outnumbered by the ruling coalition.
Topping the soft-spoken Kaieda’s to-do list is crafting a new platform stating what the party stands for - a tough task for a group that is an amalgam of former LDP members, ex-socialists and younger conservatives. “It will be very difficult,” he conceded, “But if we do not, there is no future.”
Kaieda said he wants to stress the concept of “symbiosis” as a core DPJ value - building a society glued together by mutual cooperation rather than the LDP’s ‘do-it-yourself’ capitalism.
Kaieda, who dubbed the novice Democrats’ messy governing style a sort of “own goal” that eroded voter support, is also betting that Abe’s economic recipe of big public works spending and easy money may fall short of curing Japan’s economic ills.
“We are not opposed to monetary policy easing, but that has its pitfalls,” he said, while acknowledging mere talk of Abe’s prescription had weakened the yen and boosted share prices.
“A weaker yen has merits for exporting firms but will those exporters reflect that in workers’ salaries? If not, the weaker yen will ultimately rebound on the costs of imports such as food and oil and hurt the people’s livelihoods,” he said.
Analysts say the DPJ, which dropped some key campaign promises and pushed through an unpopular sales tax rise under Noda, will have a tough time regaining public support, though a constituency exists among non-beneficiaries of “Abenomics” such as the working poor, those in low paid unstable jobs and the elderly.
“They could recover - everyone was writing the obituary of the LDP in 2009,” said Jeffrey Kingston, director of Asia studies at Temple University’s Tokyo campus. “But they are in intensive care and the prognosis is not good.”
For now, Kaieda appears to be setting his sights low, hoping to prevent the LDP-led ruling bloc from winning a majority or even a super-majority of two-thirds of the upper house seats.
The LDP and its ally have a two-thirds majority in the lower house and winning one in the upper chamber would open the way to revising Japan’s pacifist constitution for the first time.
Meanwhile, Kaieda said, there is always hope that the LDP will make a major mis-step. Abe ended his first 2006-2007 term as premier by abruptly resigning after a troubled year in office.
“They could make their own ‘own goal’,” he said.
Editing by Edmund Klamann and Ron Popeski