Japan appoints new central bank chief
Updated
After a month-long block by the Japanese opposition, the government has finally been able to appoint a new head for the country's central bank. But it's come at a political cost with the Prime Minister's popularity slumping.
Presenter: Shane Mcleod
Speaker: Richard Jerrem, Chief economist with Macquarie Capital Securities, Tokyo; Opposition leader Ichiro Ozawa: Japanese Prime Minister Fukuda.
MCLEOD: For Japan's government it was lukewarm success, served alongside embarrassment and intrigue.
After weeks of the opposition blocking its efforts, the government was finally able to appoint a new governor for the bank of Japan.
The appointment of Masaaki Shirakawa was only possible after the main opposition party at the weekend agreed to support his nomination.
The oppostion controls Parliament's upper house, and last month it twice used its numbers to veto the government's nominees for the post.
It finally accepted Mr Shirakawa because he wasn't tainted by having been a former official a the MInistry of Finance.
And, the opposition had already appointed him as deputy governor a month before.
With the appointment approved, at least one item has been checked off the 'to do' list of embattled Prime Minister Yasuo Fukuda.
Richard Jerram is Chief Economist with Macquarie Capital Securities in Tokyo.
JERRAM: I think the impressive thing is it hasn't caused very much damage, nobody is really that bothered because it doesn't look as if the bank is going to do anything with a governor or without a governor and obviously most of the action at the moment is in the US and the stability of the financial markets there so I think it's really passed the world by.
MCLEOD: There's plenty more on Prime MInister fukuda's schedule to keep him busy.
Another consequence of the opposition's control of parliament's agenda is that a special tax on petrol -- applied temporarily, for the past 30 years has lapsed.
That's meant a cut in fuel prices for consumers of about 20 cents a litre, but it's blown a hole in the government's lavish budget for roads, a notorious souce of pork-barrel funding.
Mr Fukuda has vowed to renew the tax and can use the government's lower house majority to push it through parliament.
If he does that, the Opposition says it will move to censure him and then simply refuse to conduct any more parliamentary business unless he resigns.
In parliament this afternoon, Opposition Leader Ichiro Ozawa challenged Mr Fukuda to face voters.
OZAWA: The situation is very different than before. In the last election, we were given the majority in the upper house.
MCLEOD: Mr Fukuda made a rare and emotional response, accusing the opposition of playing politics with the smooth running of the country.
FUKUDA: I'm having a very hard time. I'm having such a hard time it's almost pitiful. I'd like you to understand that. Honestly speaking I was made a full of over the Bank of Japan affairs. I was tossed about. That's how I feel.
MCLEOD: The government's woes are of its own making.
It lost the election for parliament's upper house last year, with underwhelming then-Prime Minister Shinzo Abe ceding the majority to the opposition.
He eventually quit, and the factional heavyweights of the party turned to Mr Fukuda to right the ship.
But after just over six months in the job, he too is struggling to maintain support.
In recent days there have been furtive meetings, reports of new political parties emerging, or a change of leadership of the L-D-P.
Amidst all the speculation, there's one name that keeps coming up.
Former Prime Minister Junichiro Koizumi, he famously threatened to destroy his party if it didn't embrace reform.
Since stepping down as leader in 2006 he's kept a low profile.
But earlier this week he appeared at a party conference outside Tokyo and made what may be a revealing comment.
"I feel some important winds are starting to blow", Mr Koizumi says.
Mr Fukuda had always planned to hold on to the Prime Ministership until Japan hosts the G-8 leaders summit in July.
If the breeze Mr Koizumi is talking of gains some strength, Mr Fukuda may need more than that to cling to.
