Tokyo - The opposition-dominated upper House of Japan's Diet on Wednesday rejected the government's new nominee to head the central bank in a move that is almost certain to leave the post vacant in the middle of an international financial crisis. The House of Councillors voted 125-112 against the nomination of Koji Tanami, the head of Japan's main foreign aid agency, on the day Bank of Japan Governor Toshihiko Fukui retires after five years in the office.
Tanami was the government's second choice for the post in the world's second-largest economy after it selected the bank's deputy governor, Toshiro Muto, and the House of Councillors rejected his nomination as well last week.
The opposition Democratic Party of Japan said that the background of both men as former vice finance ministers would interfere with the bank's independence.
The likely vacancy would be the first in Japan's postwar history.
The lower chamber of the Diet, the House of Representatives, led by Prime Minister Yasuo Fukuda's Liberal Democratic Party, approved the first nomination, but both houses must agree on the appointment. Media reports said the government was now considering changing the central bank law.
If both houses fail to agree on the nomination, Masaaki Shirakawa, who earlier won approval as a deputy governor from both chambers, would serve as acting governor of one of the most important central banks in the world. The 58-year-old is a former executive director of the bank.
Tanami served as vice finance minister from January 1998 to July 1999 before joining the Japan Bank for International Cooperation as its deputy governor in June 2001 and later becoming its governor.
