The DPJ continues playing hard to get

As I wrote on Monday, the DPJ may ultimately come around to Muto Toshiro, the government’s candidate for the presidency of the Bank of Japan, but it will not give in to pressure — and it will make its decision on the nomination on its own terms and at its own pace.

It increasingly looks like the DPJ’s pace will keep the government and the markets guessing into March.

On Tuesday, Ozawa Ichiro backed away from previous remarks suggesting that he will defer to the judgment of the DPJ’s investigatory subcommittee on joint personnel decisions. Instead, a committee of DPJ executives and Diet strategists will decide on personnel. The publicly stated reason for the DPJ’s foot-dragging remains Mr. Muto’s service in the Finance Ministry. Building on that, the DPJ’s Financial and Monetary section announced a standard of evaluation for candidates for the BOJ presidency, including (1) independent from the government and the Diet, (2) knowledgeable about the domestic and international financial environments, (3) crisis management skills, and (4) skills for communicating with the market.

Again, I doubt that the DPJ will ultimately veto the Muto nomination, but that doesn’t mean the party won’t make Mr. Muto and the LDP jump through hoops to get him confirmed.

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