New Finance Minister Appointed in Japan
Former trade minister Hikaru Matsunaga, a ruling party stalwart and onetime prosecutor, was appointed Friday as Japan’s finance minister in a move expected to allow the government to move forward with new economic policies.
As an expanding bribery scandal swirled around the country’s embattled Finance Ministry, Matsunaga moved swiftly to project an image of determination to clean up the mess.
“The arrest of Finance Ministry officials has badly tainted the nation’s trust in the ministry,” Matsunaga, 69, said at his first news conference in his new post. “I will use this opportunity to strengthen discipline. If we find officials who committed wrongdoing, they will be severely punished. . . . Regaining public trust in the Finance Ministry is more important than anything else.”
The arrests on bribery charges Monday of two Finance Ministry officials--Koichi Miyagawa, 53, and Toshimi Taniuchi, 48--triggered the resignations Wednesday of former Finance Minister Hiroshi Mitsuzuka and former Vice Finance Minister Takeshi Komura.
Both resigned, in the Japanese tradition, to take responsibility for the alleged misdeeds of the lower officials under them.
Views differed sharply on whether Matsunaga’s background as a former prosecutor would lead him to take a tougher stance against corruption in the ministry or, contrarily, make it easier for him to get prosecutors to back off from their investigation.
But in either case, his appointment sets the stage for a renewed effort by Prime Minister Ryutaro Hashimoto to win parliamentary passage of a $235-billion financial system stabilization plan first announced in late December.
Matsunaga also indicated that while he remained loyal to Hashimoto’s goal of cutting Japan’s long-term fiscal deficit, the government is now prepared to take fresh steps to boost economic growth. A new economic stimulus package is expected in mid-February.
Washington has pushed hard for Tokyo to take measures to boost domestic demand so that a stronger Japanese economy would draw in more foreign goods. That could help ease the regional financial crisis in Asia and keep a lid on the U.S. trade deficit with Japan.
“We must push ahead with fiscal reform as a longer-term goal, but it is necessary to take measures to cope with the economy, judging the economic conditions of the time,” Matsunaga said.
The yen weakened and stocks fell Friday. The dollar rose to 126.85 yen in late Tokyo trading Friday, up 1.18 yen from late Thursday in Tokyo. On the Tokyo Stock Exchange, the benchmark Nikkei index fell 386.12 points, or 2.27%, to close at 16,628.47.
Concerns are high among investors and analysts that the Finance Ministry scandal will further delay passage by parliament of the financial system stabilization package and other economic stimulus measures, and that Matsunaga may not be a powerful advocate of strong stimulative measures.
Matsunaga’s background as a former prosecutor may help project an image that Hashimoto’s administration is serious about cracking down on corruption. But the new finance minister is primarily perceived as a Liberal Democratic Party loyalist, not a reformer.
A 10-term legislator, Matsunaga served as education minister in the mid-1980s and was named trade minister in 1989. After graduating from law school at Waseda University, he worked as a prosecutor in southern Japan.
The two Finance Ministry officials arrested earlier in the week were accused of accepting lavish entertainment from banks in exchange for advance notice of supposedly surprise inspections.
The scandal around the Finance Ministry widened Friday when Nikkei Shimbun, Japan’s leading financial daily, reported that Atsuo Miki, a former executive of recently bankrupted Yamaichi Securities, is claiming that a Finance Ministry official encouraged the brokerage firm to hide some of the losses that ultimately brought it down.
Yamaichi went under in November with $2 billion in off-the-book hidden debts.