Nomination of Muto

March 12, 2008 12:00 AM

The head of the Bank of Japan had been alternated between a former MOF guy and a BOJ man as the BOJ was a MOF colony under the previous BOJ Law. Hayami, the first Bank President under the new BOJ Law was a BOJ man. When he retired, MOF dutifully agreed to the appointment of Fukui, another BOJ boy. Fukui had been well known as the Prince in BOJ since he was still young and was anointed to lead the Bank one day. But his career was suddenly de-railed as he was made a scapegoat in a MOF scandal. MOF knew they had de-throned the Prince, and they could not oppose to his coronation.

But MOF was planting a demonic seed in the royal palace. They innocently sent Muto, a former Jimujikan or the top MOF bureaucrat, into the Bank's number two position. It was the sign of MOF's stubborn will to get it back in five years.

MOF must have worried about Shiozaki, PM Abe's Chief Cabinet Secretary and an ex-BOJ politician, who was determined to make the Bank truly independent of the Ministry. When Shiozaki was pushed out of the Cabinet, MOF was sure they would rule their former colony again. But then came...

It is now widely believed that Ozawa Ichiro, the ailing Opposition leader, once told PM earlier that his Party would agree to the elevation of Muto. Ozawa, however, could not deliver his promise just as he failed to convince his followers on the Grand Coalition.

But why Muto? Well, before talking about Muto, what about Fukui? Is PM satisfied with Fukui's five years? If the answer is yes, why doesn't PM re-appoint Fukui for another five year term? If the answer is no, why is PM appointing Fukui's most loyal deputy to succeed him?

Is there any reason, even just one, to let Muto lead the Central Bank in this strong turbulence? He is not a professional finance man, has little knowledge about macro economy, and does not even speak English. Iwata, Fukui's another deputy, would have been better suited in anyways.