WORLD> Asia-Pacific
|
WORLD> Asia-Pacific
|
|
New Japan PM picks Fujii for finance post - media
(Agencies)
Updated: 2009-09-15 10:41
TOKYO: Incoming Japanese leader Yukio Hatoyama has picked veteran lawmaker and fiscal conservative Hirohisa Fujii as finance minister, the Nikkei business daily said, in a soothing move for investors concerned the new government will inflate an already huge public debt. Hatoyama will take office on Wednesday after his Democratic Party's huge election win over the long-dominant Liberal Democratic Party (LDP), bringing to power a government that pledges to put more money in the hands of consumers, cut waste and reduce bureaucrats' control over policy-making.
But some media had reported that the appointment faced opposition from former Democratic Party leader Ichiro Ozawa, a political mastermind whose clout over the new administration is raising concerns about a possible rival power centre that will complicate policy decisions. The pick of Fujii, 77, was welcomed by analysts worried that the new government's spending plans -- such as child allowances and toll-free expressways -- will boost issuance of Japanese government bonds (JGBs) as Japan struggles to emerge from recession. "The appointment is a positive move for the bond market as Fujii has placed a strong emphasis on trying to tap sources of financing so the government does not have to issue more debt," said Noriyuki Fukuda, a fixed-income strategist at Morgan Stanley. Fujii's backing for ultra-loose monetary policy means he is unlikely to rock markets but some analysts feared he may try to wean Japan too quickly off its reliance on exports for growth and allow the yen to rise. "What worries me about him is his comments that seem to support a strong yen," said Kyohei Morita, chief economist at Barclays Capital. "Since he is now in the ruling party and is likely to become a cabinet minister, Fujii needs to improve his communication with markets, especially with currency market players, even if he is following his beliefs. He can let the yen rise after transforming the economy into one led by domestic demand, but there is risk of the yen rising further before that happens." The yen hit 90.18 against a weakening dollar on Monday, its highest since February, and was trading around 91 yen per dollar on Tuesday. Some analysts have also expressed concern that the septuagenarian Fujii might have trouble coping with the rigours of frequent international meetings as major countries seek to ensure the global economy recovers from a financial crisis. Hatoyama, the wealthy grandson of a prime minister, said he would begin choosing cabinet ministers later on Tuesday after a meeting of all the party's lawmakers. The Nikkei business daily, without citing sources, said Hatoyama had decided to pick Fujii after meeting Ozawa on Monday, and the mass circulation Yomiuri newspaper had a similar report. The Yomiuri, without citing sources, added that the Democratic Party's policy chief Masayuki Naoshima was likely to become the new minister of economy, trade and industry, a role that also includes energy issues. Hatoyama has already said he would pick Naoto Kan, a former health minister, to head a powerful new agency to oversee the budget process and set policy priorities. The new National Strategy Bureau will be tasked with reforming what the Democrats say is a cumbersome policy-making system that relied heavily on recommendations from bureaucrats and in which the ruling party competed with the cabinet on decisions. The new agency will include officials from the public and private sector. Hatoyama has also said Katsuya Okada would become foreign minister -- a post being closely watched in Washington because of concerns that arose about the US-Japan alliance after his party vowed a more independent diplomatic course. |
