BOJ nominee Kono rejected as lawmakers seek easing

TOKYO: Prime Minister Yoshihiko Noda’s nominee to the Bank of Japan (BOJ) board was rejected by the upper house of parliament in a victory for lawmakers pressing for more monetary easing to spur growth and end deflation.

BNP Paribas SA economist Ryutaro Kono was blocked by a vote of 127 to 111 in the house, where the ruling Democratic Party of Japan is a minority.

The BOJ is likely to hold off on adding to asset purchases in a meeting that ends on April 10 after unexpectedly adding 10 trillion yen (US$122 billion) to the programme in February, according to a Bloomberg News survey of 13 analysts. Yesterday’s decision left the central bank with two vacant seats on the nine-person board and gives lawmakers a platform for urging Governor Masaaki Shirakawa to take bolder action to end decade-long deflation.

The rejection of Kono, 47, “could add more pressure to the BOJ to do more,” Naohiko Baba, chief economist at Goldman Sachs Group Inc in Tokyo, said yesterday.

He said Kono’s views on monetary policy were “very close” to Shirakawa’s.

Kono, ranked the nation’s top economist by Nikkei Veritas, the weekly edition of Japan’s largest business newspaper, couldn’t immediately be contacted for comment. Takeshi Miyazaki, a DPJ lawmaker and a leader of the ruling party’s anti-deflation group, said last month that Kono was perceived as someone who is “negative towards monetary easing.”