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Economy

Vacancies loom at the top as scandal consumes Diet

Central bank would be hobbled in a crisis until senior posts are filled

BOJ headquarters in Tokyo could soon be without a permanent leader as legislative chaos delays the confirmation of senior officials.

TOKYO -- The Bank of Japan is beginning to worry that a widening political scandal could leave two deputy governor seats vacant when their current occupants leave next week as parliamentary chaos delays key confirmation votes.

The BOJ's current deputies will depart Monday when their five-year terms expire. The government has nominated Waseda University economist Masazumi Wakatabe and current BOJ Executive Director Masayoshi Amamiya to fill those seats. Confirmation hearings for both men have wrapped up, and the Diet has only to give its final approval.

But lawmakers are otherwise occupied after the Finance Ministry admitted Monday to altering documents related to the sale of public land at bargain prices to Moritomo Gakuen, a nationalist private school operator with links to Prime Minister Shinzo Abe and his wife. The news has pitted the ruling Liberal Democratic Party against an emboldened opposition calling for investigations, putting confirmation votes behind schedule.

If the nominees are not approved by Monday, the central bank's Tokyo branch will be left without an obvious leader when BOJ Gov. Haruhiko Kuroda heads to a meeting of Group of 20 central bankers and finance ministers in Argentina. The BOJ has not been without deputy governors in more than nine years.

And if lawmakers by any chance do not approve Kuroda's reappointment as governor by the time his term ends April 8 nor are the deputy positions approved by that time, all three of the bank's top positions would be left vacant. In that case, Yutaka Harada, the longest-serving member of the policy board, would take charge when that body meets. Amamiya would be in charge of administrative functions in his role as executive director of the monetary affairs department.

Masazumi Wakatabe, left, and Masayoshi Amamiya have been nominated as deputy governors of the Bank of Japan but not yet confirmed.

But while ordinary functions would proceed as usual, there are concerns about how the BOJ would respond in a crisis, as the lack of a sitting governor could hinder coordination with other central banks around the world.

The document scandal shows no sign of abating, and it is difficult to tell when the Diet will resume ordinary business. "We really hopes things somehow settled down this week," says one BOJ insider.

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