Kajiyama the buzz as world awaits Japan MOF post
By William Mallard
TOKYO, July 24 (Reuters) - Japan's prime minister-designate Keizo Obuchi left the world guessing on Friday about who might get the key post of finance minister, but speculation centred on whether he would pick one of his vanquished foes.
Obuchi, the 61-year-old foreign minister, handily beat veteran politician Seiroku Kajiyama and Health Minister Junichiro Koizumi in the race to head the ruling Liberal Democratic Party, and thus become premier.
Attention immediately focused on the choice for finance minister, with many debating the chances of Kajiyama, 72, an outspoken former cabinet secretary who has made a name for himself with bold proposals to clear the mass of bad loans weighing on the financial sector.
Obuchi, Kajiyama and Koizumi, 56, were vying to replace Prime Minister Ryutaro Hashimoto, who is resigning over the LDP's drubbing in July 12 elections for the Upper House of parliament, largely a vote of no-confidence in Hashimoto's cautious handling of the recession-wracked economy.
Financial markets, which had originally cheered the cantankerous Kajiyama for his talk of ''major surgery'' to right the ailing bank sector, were split on the chances of Obuchi giving him the finance portfolio.
Some market players also mentioned outgoing LDP secretary general Koichi Kato, while others murmured the slim possibility of a non-politician as finance minister.
''The cabinet postings will be particularly important, especially if the runner-up (Kajiyama) gets the Finance Ministry post,'' said Michael Wilkins, a dealer at Credit Lyonnais.
That, traders say, would give the markets the best of both worlds: Obuchi, the conciliatory deal maker, at the top, reining in the firebrand Kajiyama.
But although Kajiyama's name was the most prominent, many said Obuchi faces a tough and thankless choice in naming someone to drag the world's second-biggest economy out of dire recession. Dust would have to settle before the world had a clearer picture who would get the post, they said.
''How could I know what the next prime minister doesn't even know?'' asked political analyst Shigenori Okazaki at SBC Warburg in Tokyo.
Obuchi himself gave few clues as to his choice, telling an inaugural news conference that he had not decided key party or cabinet posts.
Asked about the finance portfolio, he said only: ''It has to be someone who can firmly carry out these policies, someone who is capable and who can elicit trust.''
Obuchi is expected to begin choosing top LDP executives over the weekend, and must ready a cabinet by July 30, when parliament is to convene and name him premier. The LDP's Lower House majority virtually assures that Obuchi will be premier.
Kajiyama got an unexpectedly large 102 of the 411 votes cast in the LDP vote, against winner Obuchi's 225 and Koizumi's 84.
The strong Kajiyama showing may make him a force to reckon with in the horse-trading to select a cabinet.
One prominent Obuchi backer in the party, Yuji Tsushima, told Reuters Television: ''In my personal opinion, Mr Kajiyama is desirable for the finance minister, but cabinet decisions can't be made immediately and we will start discussions soon.''
A key member of the small opposition Liberal Party, Yoshio Suzuki, said: ''I'd like to see Mr Kajiyama as finance minister but I think he will reject it.''
Kajiyama has not made his intentions known on that score, unlike Koizumi, who has said he would not accept a post in an Obuchi cabinet.
Some observers said Kajiyama's revolt -- he bolted Obuchi's LDP faction to mount a challenge -- meant he would not be considered to head the Finance Ministry.
Okazaki of SBC Warburg said the government of Obuchi will essentially be a continuation of the Hashimoto regime, likely continuing the cautious line of the LDP's Kato and outgoing party policy chief Taku Yamasaki.
''What Obuchi, Kato and Yamasaki want to do with the banking sector is very different from what Kajiyama wants to do. They don't want to close banks. Kajiyama wants to close half the banks,'' Okazaki said. ''How can they compromise?''
One clue, though, that Obuchi might be seeking to defy the traditional alloting of cabinet posts along factional lines would be if he picks an anti-establishment gadfly like Shizuka Kamei for a party executive post, Okazaki said.
Kamei, like Kajiyama, is a key proponent of having the LDP team up with other conservative forces in parliament, such as the Liberal Party.
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If kajiyama does not become finance minister, I will no longer buy Japanese ADRs or stock. Will probably short the currency too. |
