In a transparent attempt to shift the blame for the Bank of Japan "crisis" from the government to the DPJ, today the Fukuda Cabinet officially submitted its nomination of Muto Toshiro to be the next BOJ president. If a Mr. Muto or another candidate is not confirmed within the next twelve days, the post will be vacant.
Without the agreement of the DPJ-controlled HC, any nomination is a non-starter.
The Fukuda government seems increasingly desperate to see this battle concluded in its favor, and to that end is pursuing two strategies simultaneously. One strategy calls for Mr. Fukuda to discuss the issue with Mr. Ozawa in the hopes of reaching an agreement. Yamaoka Kenji, Ozawa loyalist and DPJ Diet strategist, nixed this idea completely on behalf of Mr. Ozawa, suggesting that the DPJ will consider Mr. Muto's nomination itself and then answer the government. The other strategy is, of course, what the government did today: nominating Mr. Muto in an attempt to place the burden for a vacancy on the DPJ.
According to Mainichi, the DPJ recognizes that the government's move has put it in a tough position, as the party neither wants to bear the blame for a vacancy nor roll over for the government. We may be reaching the point at which the DPJ's latest wave of momentum dissipates — a point made by Jun Okumura here. Although the DPJ has indicated that it will not consent to Mr. Muto's nomination, the possibility of an about-face remains.
It will ultimately depend on Mr. Ozawa's read of the political situation. If Mr. Ozawa reckons that the domestic political consequences of opposing the government's nomination are slight, the DPJ will without question say "damn the markets" and reject the nomination. If he concludes that obstructing Mr. Muto's elevation to the BOJ presidency will play into the LDP's efforts to construct a general election narrative that paints the DPJ as little more than a noisy rabble unfit for government, the DPJ may step back from the brink of obstruction, make some show of having vetted Mr. Muto and declared him not tainted by his MOF past, and move on to the next issue. Doing so would entail not just a defeat for the DPJ, but also move the DPJ closer to an open fight over the leadership of the party, as anti-Ozawa DPJ members — some of whom have been leading critics of Mr. Muto's nomination on the basis of his MOF past and concerns for BOJ independence — may react by taking their desire to see Mr. Ozawa unseated in the September party leadership election out into the open.
This situation is typical of the DPJ's strategy since winning the HC election. Faced with what appears to be an opportunity to undermine the government, the DPJ throws all of its energy into exploiting it, only to overextend itself and leave itself vulnerable to public backlash and charges of fecklessness from the government.
A large segment of the public may be ready to vote against the LDP in a general election, but I reckon an even greater segment of the public wants the government and the Diet to work on their behalf.
Regardless of the resolution of this "crisis" — I use the quotation marks because aside from a slight shudder in the market, the world will not end if there is a vacancy at the BOJ — one thing is certain: it will prompt a new wave of articles in the foreign press lamenting the consequences of Japan's supposedly byzantine politics.
Without the agreement of the DPJ-controlled HC, any nomination is a non-starter.
The Fukuda government seems increasingly desperate to see this battle concluded in its favor, and to that end is pursuing two strategies simultaneously. One strategy calls for Mr. Fukuda to discuss the issue with Mr. Ozawa in the hopes of reaching an agreement. Yamaoka Kenji, Ozawa loyalist and DPJ Diet strategist, nixed this idea completely on behalf of Mr. Ozawa, suggesting that the DPJ will consider Mr. Muto's nomination itself and then answer the government. The other strategy is, of course, what the government did today: nominating Mr. Muto in an attempt to place the burden for a vacancy on the DPJ.
According to Mainichi, the DPJ recognizes that the government's move has put it in a tough position, as the party neither wants to bear the blame for a vacancy nor roll over for the government. We may be reaching the point at which the DPJ's latest wave of momentum dissipates — a point made by Jun Okumura here. Although the DPJ has indicated that it will not consent to Mr. Muto's nomination, the possibility of an about-face remains.
It will ultimately depend on Mr. Ozawa's read of the political situation. If Mr. Ozawa reckons that the domestic political consequences of opposing the government's nomination are slight, the DPJ will without question say "damn the markets" and reject the nomination. If he concludes that obstructing Mr. Muto's elevation to the BOJ presidency will play into the LDP's efforts to construct a general election narrative that paints the DPJ as little more than a noisy rabble unfit for government, the DPJ may step back from the brink of obstruction, make some show of having vetted Mr. Muto and declared him not tainted by his MOF past, and move on to the next issue. Doing so would entail not just a defeat for the DPJ, but also move the DPJ closer to an open fight over the leadership of the party, as anti-Ozawa DPJ members — some of whom have been leading critics of Mr. Muto's nomination on the basis of his MOF past and concerns for BOJ independence — may react by taking their desire to see Mr. Ozawa unseated in the September party leadership election out into the open.
This situation is typical of the DPJ's strategy since winning the HC election. Faced with what appears to be an opportunity to undermine the government, the DPJ throws all of its energy into exploiting it, only to overextend itself and leave itself vulnerable to public backlash and charges of fecklessness from the government.
A large segment of the public may be ready to vote against the LDP in a general election, but I reckon an even greater segment of the public wants the government and the Diet to work on their behalf.
Regardless of the resolution of this "crisis" — I use the quotation marks because aside from a slight shudder in the market, the world will not end if there is a vacancy at the BOJ — one thing is certain: it will prompt a new wave of articles in the foreign press lamenting the consequences of Japan's supposedly byzantine politics.
2 comments:
The other strategy is, of course, what the government did today: nominating Mr. Muto in an attempt to place the burden for a vacancy on the DPJ.
This is the step I thought Fukuda would take if he decided to get serious.
Of course, Upper House approval isn't necessary under all conditions. If the diet is dissolved, the Cabinet can approve Mr Muto by itself.
That would be interesting.
You do not bring up the other option open to the DPJ: nominate its own candidate for the post. If they pick somebody - anybody, really - with the clear background and ability to do the job they will effectively shift the issue back onto the ruling coalition, and ask them why they aren't supporting a qualified candidate with opposition backing?
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