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World's No. 2 Economy Has Vacancy at Top
Koji Tanami, left, has been nominated to succeed Toshihiko Fukui, right, as head of the Bank of Japan.
(Pool - Getty Images)
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The paralysis comes as Japan appears to sliding into recession and the yen this week rose to its highest level against the dollar in nearly 13 years -- an alarming development for a country that has grown rich off exports.
Stocks of major exporters such as Toyota and Sony have declined sharply.
Western financial analysts complain that Japan's government is returning to old bad habits of excessive regulation, onerous restrictions on foreign investment and selection of top officials based on party loyalty and seniority.
Fukuda, 72, a longtime party elder, could be said to have come into power by that route. The election he won last fall was only within the ruling party, which has governed Japan almost without interruption since World War II.
The party selected Fukuda to replace Shinzo Abe, who had won a nationwide election but quit suddenly after less than a year because of financial scandals and a strong public perception that he was inept.
When Fukuda became prime minister, public expectations were high that he would restore competence and finesse a way around the opposition's control of the upper house of parliament.
But he has not come close to finding a way around that roadblock.
"He is simply not the leader type," said Tomoaki Iwai, a politics professor at Nihon University in Tokyo.
Morgan Stanley's Feldman said Fukuda has fallen back on an old party pattern of picking appointees based primarily on their affiliations rather than qualifications.
As for Tanami, Fukuda's newest nominee to lead the central bank, Feldman echoed other financial analysts here by saying that he appears to have few of the qualifications expected of a central bank boss.
"From his personal history, I see no experience in macro- or international finance, or banking or securities," Feldman said. "I have seen no contributions to debate on any key macro- or central-banking issues, and no involvement with potential counterparts" in the world's other central banks.
If a leader for the bank cannot be found before the current one leaves office Wednesday, a deputy governor is expected to become acting head of the bank.
Special correspondent Akiko Yamamoto contributed to this report.
