New BOJ deputies start without boss

The Bank of Japan's Policy Board on Friday held its first postwar meeting without a central bank governor in attendance.

The newly appointed Bank of Japan deputy governors, Masaaki Shirakawa, left, and Kiyohiko Nishimura, respond to reporters' questions Friday night.(SHOGO KOSHIDA/ THE ASAHI SHIMBUN)

The depleted board decided to name Masaaki Shirakawa as chairman of the Policy Board. Shirakawa will also serve as acting BOJ governor until the Diet can agree on a new governor.

Shirakawa was appointed deputy governor effective Thursday along with Kiyohiko Nishimura.

The opposition-controlled Upper House twice rejected nominees presented by the Cabinet of Prime Minister Yasuo Fukuda for BOJ governor, leading to the unusual situation of Shirakawa serving as acting governor.

In addition, because no Policy Board member has been chosen to replace Nishimura, Friday's meeting was held with only seven members. Normally, board meetings are held with the BOJ governor, two deputy governors and six Policy Board members.

At a news conference after the Policy Board meeting, Shirakawa said he hoped the Diet could settle on a new BOJ governor as soon as possible so that the central bank could return to a more normal situation.

Shirakawa stressed, however, that the absence of a BOJ governor would have little effect on the central bank as an organization.

"I would like to gain the trust of the public through a series of appropriate policy decisions and serious explanations of those decisions," he said. "That will be the base for securing the independence of the BOJ."

Shirakawa declined to comment on the responsibility of politicians for failing to approve a BOJ governor.

Shirakawa, a former BOJ executive director and professor at Kyoto University's graduate school, revealed that Fukuda called him a few hours before the government announced his nomination as BOJ deputy governor to offer him the post.

The Policy Board also decided to select Nishimura, who was a professor at the University of Tokyo graduate school before becoming a BOJ Policy Board member, to serve as acting chairman of the board should anything happen to Shirakawa.

"This is a test for the BOJ, and everyone at the BOJ must work together to meet this challenge," Nishimura said about the absence of a BOJ governor.(IHT/Asahi: March 22,2008)