Japan

Top FX diplomat likely to be reappointed as Japan navigates global trade hazards

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The Japanese government plans to reappoint career bureaucrat Masatsugu Asakawa as its top currency diplomat, a source with direct knowledge of the matter told Reuters on Friday, maintaining the status quo at a time of global trade turbulence.

Asakawa became vice finance minister for international affairs at the finance ministry, or Japans top financial diplomat, in 2015. His reappointment would make him the longest-serving top financial diplomat since Bank of Japan Gov Haruhiko Kuroda, who served as vice finance minister for international affairs for 3 1/2 years to Jan 2003.

Senior posts at the ministry are reviewed annually and it is rare for an official to be kept in a post for this long, highlighting the consistency Asakawa can bring to Japans relationship with the United States as well as other countries.

“Asakawa has been a stable hand in handling policy issues, and he has dealt well with such cases as sudden yen spikes by coordinating with the Bank of Japan and the Financial Services Agency,” said Masaki Kuwahara, senior economist at Nomura Securities. “His reappointment should give a sense of relief to markets particularly at a time when the United States and China are on the verge of falling into a trade war, making it highly unpredictable how currencies move from now on.”

U.S. President Donald Trump has been following through on pledges he made during his 2016 presidential campaign to get tough on China, which he accuses of unfair trade practices.

He has also criticized Japan for running large trade surpluses with the United States.

Asakawas role is to oversee Japans currency policy and international economic diplomacy, including representing Tokyo at meetings of the Group of Seven advanced countries and the Group of 20 major economies.

Japan has not intervened in the currency market under Asakawa, ministry records show, though he tends to talk tough on markets to stem yen spikes that risk hurting the export-reliant economy.

Asakawa is close to Finance Minister Taro Aso, having served as his executive secretary when Aso was prime minister in 2008-2009 during the global financial crisis, and as his executive assistant when he became finance minister in 2012.

Aso made no mention of the Asakawa appointment at a regular news briefing on Friday. The minister is expected to officially announce a regular finance ministry reshuffle in coming weeks.

The government will also promote Shigeaki Okamoto, currently director-general of the budget bureau, to administrative vice minister – the top bureaucrat at the ministry, the source said on condition of anonymity because he is not authorised to speak to media.

© (c) Copyright Thomson Reuters 2018.

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