The Democratic Party of Japan (DPJ) decided Tuesday to accept Masaaki Shirakawa as Bank of Japan(BOJ) chief, ending a stalemate that has left the world's second largest economy without a permanent central in the midst of a global credit crisis.
The party also decided not to accept Hiroshi Watanabe as BOJ deputy governor citing his political background.
Speaking to the House of Representatives steering committee, Shirakawa, currently one of two BOJ deputy governors, described the current situation in which the chair of governor is empty as ''exceptional,'' and pledged to devote himself to his new role and recover credibility for the central bank.
Shirakawa is expected to be formally nominated on Wednesday.
The appointment fills a vacuum in the at the top of Japan's central bank, just in time for him to attend a key meeting of G7 finance leaders in Washington this Friday.
He is likely to call for action to ease pressure on the financial markets ushered in by the credit crisis and a subprime housing implosion in the U.S.
First of all, it should be efforts by the private sector. But if the efforts by the private sector are not enough, a public capital fund injection, among various options, may become necessary, Shirakawa told a parliamentary hearing considering his BOJ candidacy.
As for national economy, Shirakawa said, the nation's economy is going downward because of soaring fuel and materials prices and weakening global economy. But the economy will recover after a while because Japanese financial market is relatively stable compared to overseas market.
Shirakawa insisted on the independence of BOJ apart from financial ministry and also emphasized efforts to explicate BOJ policies to normal citizens.
The governor's post has been vacant since March 19 because of a parliamentary deadlock over finding a successor. The opposition-controlled upper house has rejected two candidates named by the ruling party, which controls the lower house.
A third rejection will be a devastating embarrassment for Prime Minister Yasuo Fukuda, who ran the risk of having no central bank head to send to G7.