Japan’s incoming Finance Minster likely to toe line

TOKYO - Reuters

Koriko Jojjima is replacing Jun Azumi as Japan’s new finance minister. REUTERS photo

Japanese Prime Minister Yoshihiko Noda appointed as finance minister yesterday a veteran lawmaker expected to follow his line on budget reform and currency intervention in a new cabinet unveiled ahead of an election due in months.

Koriki Jojima, 65, who served as the parliamentary affairs chief for the ruling Democratic Party of Japan (DPJ), will take charge of the world’s third largest economy as it teeters on the brink of recession, hurt by a global slowdown and a strong yen.

Noda makes third cabinet re-shuffle
Noda, who took office in September 2011 as the Democrats’ third prime minister in as many years, had changed his cabinet line-up twice before. The third reshuffle is seen as a last-ditch effort to boost the Democrats’ sagging ratings.

Analysts said neither Jojima nor the other nine new ministers would have much impact on government policy, with the shake-up mainly designed to give those with greatest voter appeal more prominent roles within the party or cabinet.

Jojima replaced Jun Azumi, 50, an eloquent and experienced campaigner who once worked as a presenter at public broadcaster NHK and who took over a senior party post.

Jjima is likely to toe Noda’s line on the need for fiscal reforms given he was instrumental in securing a political deal on the prime minister’s plan to double the sales tax to 10 percent by October 2015.

Little is known about Jojima’s views on monetary and currency policies, but he is expected to stick with the government line on the need to work with the central bank to beat deflation and to act firmly against excessive yen gains.

“I doubt if Noda took into account the need to put the right person in the right place,” said Kyohei Morita, chief Japan economist at Barclays Capital. “The fact that he can reshuffle the cabinet so many times in a year indicates that bureaucrats, not politicians, guide policies include currency intervention.”
“As such, I see no change in currency policy whereby authorities give verbal warning when the dollar falls below 78 yen and stand ready to intervene in case of excessive gains,” he said.