Japanese Trade Union Confederation (RENGO)

Koga says!
Statement Calling for Resignation of BOJ Gov. Fukui for Investing in the Murakami Fund

1. On June 13th, the House of Councilors Financial Affairs Committee revealed that Bank of Japan Governor Toshihiko Fukui invested 10 million yen in the Murakami Fund – led by Yoshiaki Murakami who was arrested on June 5th for allegedly violating the Securities and Exchange Law. Governor Fukui stated that he made the investment before taking over the post of Governor of the Bank of Japan while he was still a private citizen and chairman of the Fujitsu Research Institute in the fall of 1999. He also revealed that he applied for a cancellation of the investment in February this year. Since the actual termination of the contract will be take effect at the end of June, as of this moment, Fukui is still invested in the Murakami Fund.
   
   
2. The Bank of Japan is the institution responsible for deciding Japan’s financial policies and the Governor is its executive officer. Although Fukui made the investment before his appointment as Governor and while he was still a private citizen he cannot be fully absolved of his moral responsibility as BOJ Governor for the fact that he did not remove the funds after taking over the office of Governor in 2003. In addition, Fukui left his money in the Fund and did not apply for cancellation until after the January 23rd arrest of former Livedoor Co. President Takafumi Horie for allegedly violating the Securities and Exchange Law who bought up shares of Nippon Broadcasting System, Inc. with which the Murakami Fund was also associated.
   
   
3. After news of the incident became public, Prime Minister Koizumi stated that Fukui had no moral obligation and even Chief Cabinet secretary Abe said, "I expect him continue to carry out his duties as BOJ Governor." Koizumi and Abe were quick to demonstrate that neither had any intention of pursuing Governor Fukui's responsibility.The Bank of Japan Law stipulates that the Bank of Japan is the central bank independent of the government. Yet the Prime Minister has the power to appoint Governors to the Bank of Japan. The government should take this incident seriously and judiciously exercise its authority of appointment.
   
   
4. The Japanese economy is now entering a very crucial phase where it is breaking away from many years of protracted deflation which has plagued its citizens. Extending the quantitative monetary easing policies of March, the major policy decisions that lay ahead of us include a lifting of the zero-percent interest rate policy. Judging from this time of scandals, we can only be greatly concerned whether the Bank of Japan under Governor Fukui’s leadership will be able to make the important decisions while maintaining its independence from the government. Governor Fukui should step down from his position immediately.