Toshihiko Fukui - Articles - Zimbio

Japan eyes worries over U.S. and markets ahead of G7

Thu, 19 Oct 2007 21:31:00 GMT

posted by chero

- Financial markets have settled down somewhat after the last few months of turmoil, but the problems are not over yet, Bank of Japan Governor Toshihiko Fukui said late on Thursday, hours before a Group of Seven meeting.

Japanese Finance Minister Fukushiro Nukaga added that Friday's G7 meeting of finance officials will be crucial for discussing the impact of the market turbulence, adding that Japan would tell its G7 peers that it wants to play a role in underpinning stable economic growth in the world.

"Financial markets are slowly improving, but problems have yet to be solved," Fukui told reporters in Washington.

Global financial markets were shaken by a sudden tightening in credit conditions in early August stemming from a downturn in the U.S. subprime mortgage market.

The health of the world economy in the wake of the turbulence will be high on the agenda when finance ministers and central bank governors from Britain, Canada, France, Germany, Italy, Japan and the United States meet on Friday.

The Japanese central bank chief, who met with U.S. Federal Reserve Chairman Ben Bernanke on Thursday, remained cautious about the U.S. economic outlook, noting that uncertainty over the world's largest economy is growing at least in the near term.

"Any prolonged slowdown in the U.S. housing market is a source of concern and raises uncertainty," Fukui said.

But he added: "We believe that after a period of slower growth, the U.S. economy will return moderately to its potential growth, and we believe that that main scenario has not changed."

The International Monetary Fund on Wednesday slashed its U.S. and global growth estimates for 2008 in a twice-yearly report, citing the housing downturn and financial market unrest.

It now expects 4.8 percent growth in the world economy in 2008, down from its previous estimate of 5.2 percent growth.

Nukaga said he was looking forward to attending his first G7 finance ministers' meeting.

"I will tell others that Japan is making efforts to ensure sustained growth and that it wants to play a role in achieving stable global growth," Nukaga told reporters as he arrived in Washington late on Thursday.

Nukaga also said he would discuss the global economic outlook and how the U.S. subprime issues affect the U.S. economy with U.S. Treasury Secretary Henry Paulson in a meeting on Friday.

On currencies, Nukaga and Fukui said little.

When asked what kind of G7 talks he expected on currencies, Nukaga said: "We will discuss global economic conditions and exchange views on economic fundamentals, and the issue of foreign exchange rates will of course be raised."

Speaking separately, Fukui said the G7 would discuss foreign exchange rates in the broader context of conducting economic and monetary policy so that currencies reflect economic fundamentals.

Their comments came before the dollar slipped below 115 yen briefly, hitting its lowest level since October 1, during Asian trading hours on Friday as a slide in Japanese equities pointed to an ebbing of risk appetite and encouraged unwinding of risky bets against the low-yielding yen.

On Japan's monetary policy, Fukui said his stance would not change just because he is in Washington.

Asked if it would be difficult to conduct a rate hike by the end of the year, Fukui merely said that the BOJ's policy-setting board will make a decision by weighing market conditions and the economy going forward.

Traders expect the BOJ to raise the key policy target rate from the current 0.5 percent around December or early next year.

Bank With No Boss

Wed, 20 Mar 2008 04:30:00 GMT

posted by scottpasinski

Japan's Opposition DPJ rejected two government nominees for BOJ Governor; Analysis by Yukio Hatoyama, DPJ Secretary General; Masaaki Shirakawa as Interim BOJ Governor; Analysis by Toshihiko Fukui, Former BOJ Governor; Under Fukui the Bank of Japan ended its zero interest rate policy

BOJ Official Warns Japan Economy Slowing

Thu, 21 Mar 2008 20:47:00 GMT

posted by dagg988
By Yuri Kageyama, AP Business Writer

Senior Central Banker in Japan Warns That Economy Is Slowing Sharply TOKYO (AP) -- Japan's interim central bank chief vowed Friday not to let the absence of a governor hamper the country's economic and financial activities while another central bank official said the economy is slowing "sharply."

The Bank of Japan has no governor after the opposition controlled upper house of parliament rejected two government nominations in a row, saying they were too politically connected as former Ministry of Finance bureaucrats to uphold the central bank's independence.

The five-year term of former Gov. Toshihiko Fukui ended Wednesday.

A new central bank deputy head, Masaaki Shirakawa, whose nomination was approved last week, was named acting governor this week.

"We are in an unusual situation without a governor," Shirakawa said at a press conference Friday. "But we cannot let the bank's operations stall. I will fulfill my duties until a governor is appointed."

Kiyohiko Nishimura, the bank's other deputy governor, said Japan's economic slowdown is getting worse. READ MORE

Diet stalemate over BOJ governor appointment finally comes to an end

Tue, 9 Apr 2008 18:41:03 GMT

posted by Okinawa

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Both houses of the Diet approved the elevation of Bank of Japan (BOJ) Vice Gov. Masaaki Shirakawa to its top post on Wednesday, putting an end to a three-week vacuum in the central bank leadership.

The approval comes shortly before the Group of Seven conference of finance ministers and central bank governors opens in Washington on Friday.

The post of central bank governor had been vacant since former Gov. Toshihiko Fukui's term expired on March 19 because the opposition-controlled House of Councillors rejected two other candidates. Shirakawa, 58, had served as acting BOJ governor over that period.

The Upper House plenary session voted Wednesday to endorse the appointment of Shirakawa as BOJ governor after the largest opposition Democratic Party of Japan (DPJ) voted for him. The House of Representatives, in which the ruling coalition holds an absolute majority, also approved the appointment.

However, the Upper House disapproved of the appointment of Hitotsubashi University graduate school Prof. Hiroshi Watanabe, 58, who previously worked as deputy vice minister for financial affairs, as vice governor.

As a result, one of the two posts of vice governor will remain vacant for the time being as the appointment of top BOJ officials needs approval from both chambers of the Diet.

"We can't immediately find another candidate who is suitable for the post. I think the post will remain vacant for now," Chief Cabinet Secretary Nobutaka Machimura told a regular press conference on Wednesday morning.

The government of Prime Minister Yasuo Fukuda initially proposed to elevate then BOJ Vice Gov. Toshiro Muto, who had previously served as administrative vice finance minister, to governor.

The DPJ rejected the proposal on the grounds that his appointment as central bank governor would run counter to the principle of separation of fiscal and financial policies. However, the DPJ supported the appointment of Shirakawa as vice governor.

The government subsequently proposed to appoint Koji Tanami, also a former administrative vice finance minister, only to be rejected by the Upper House.

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Ruling and opposition blocs haggle over next BOJ chief

Sun, 17 Mar 2008 14:25:23 GMT

posted by Okinawa

{mosgoogle right}

TOKYO (AP) -- Ruling and opposition parties haggled Monday over who should replace the outgoing central bank chief, deepening a stalemate over a key position at the helm of the world's second-largest economy.

With just two days left until Toshihiko Fukui's term as Bank of Japan governor expires, the impasse between the two camps was an embarrassment to the Japanese government amid mounting concerns over a global economic slowdown.

Tokyo shares were hammered Monday, with the Nikkei 225 Stock Average losing as much as 4.5 percent as the dollar plunged to a 12 1/2-year low against the yen.

"With movements in foreign exchange and stock prices, this is something we need to decide quickly," Kyodo News agency quoted Prime Minister Yasuo Fukuda as telling reporters.

The House of Councillors, which is controlled by the opposition, triggered the standoff last week by rejecting the government's nominee, Toshiro Muto. He is currently No. 2 at the Bank of Japan.

The ruling Liberal Democratic Party, or LDP, was hoping to convene a conference of representatives from both the lower and upper houses of the Diet later Monday and propose a new candidate.

"We are working hard right now so that we can submit a proposal," Chief Cabinet Secretary Nobutaka Machimura said, adding that the timing was unclear.

Local media reported that the LDP had floated the possibility of keeping Fukui in office to avoid a power vacuum at the bank. The idea was immediately rejected by the opposition Democratic Party of Japan, or DPJ.

A senior DPJ official could not confirm those reports.

The DPJ has argued it opposes Muto because his background as a former bureaucrat at the Ministry of Finance would undermine the central bank's independence.

The DPJ's rejection of Muto also stemmed from anger that the LDP has used its majority in the more powerful Lower House to ram through some bills that require approval from only that chamber.

The appointment of the central bank governor needs approval from both houses of the Diet.

If the two parties are unable to agree in time for Fukui's departure, former BOJ Executive Director Masaaki Shirakawa -- whose nomination as a BOJ deputy governor was approved by the Diet last week -- could step in as interim bank chief.

While few expect the political scuffling to have any immediate damage to Japan's economy, the prospect of a central bank without a governor has raised concerns about future monetary policy.

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