Japan picks currency chief for top ADB job

Tokyo nominates minister to replace Kuroda at Asian Development Bank

PUBLISHED : Friday, 08 March, 2013, 12:00am
UPDATED : Friday, 08 March, 2013, 5:37am

Japan will nominate its top currency official, Takehiko Nakao, to head the Asian Development Bank as Haruhiko Kuroda prepares to step down to lead the Bank of Japan.

"Mr Nakao has gained extensive experience in international finance and development," Finance Minister Taro Aso said yesterday.

Aso said the vice-finance minister was "the most qualified candidate". He did not say who would replace Nakao.

The previous two appointments were promotions of heads of the ministry's international bureau - currently Tatsuo Yamasaki.

Mitsuhiro Furusawa, the head of the financial bureau and a former International Monetary Fund official, might replace Nakao, the Sankei newspaper said on February 26 without citing anyone.

Japan has held the presidency of the Manila-based ADB since the institution was founded in 1966, and is tied with the United States as having the largest voting power at the development bank.

China lacked sufficient support to grab the role and Japan could retain its hold, said Masahiro Kawai, the dean of the Asian Development Bank Institute in Tokyo, in January.

Prime Minister Shinzo Abe nominated Kuroda, who has led the ADB since 2005, as central bank governor last week. Current governor Masaaki Shirakawa steps down on March 19.

Nakao oversaw the government's biggest-ever one-day currency-market intervention on October 31, 2011, after the yen reached a post-war high of 75.35 per US dollar.

In a statement yesterday, Nakao said he would ensure the ADB was backed by sufficient financial resources if confirmed as president.

Nakao, who joined the finance ministry in 1978 and has an MBA from the University of California, Berkeley, is the author of a 2008 book, America's Economic Policy: Can it Sustain its Strength? In 2010, he said the stability of the international financial system was premised on the dollar as a "key currency".

Yoo Gwang-yeol, the director general of international financial co-operation at the South Korean finance ministry, yesterday declined to comment on Nakao's nomination.

Kuroda is a predecessor of Nakao in the vice-finance minister job, directing Japan's currency policy from 1999 to 2003.