Japanese Prime Minister Yukio Hatoyama‘s first official day on the job has come with lots of media attention, photo opportunities and the first couple of speed bumps for his administration.
The contrast with his predecessor was clear from the TV coverage. All but one of the major channels in Tokyo carried him live. Leading up to his election drubbing last month, former Prime Minister Taro Aso could not always get his pressers carried live even on national broadcaster NHK.
Yet amid the ritual and grand opening statements, one minister gave an already strengthening yen another kick up, while a second pushed down the shares in Japanese banks — both before they’d been officially announced and sworn into their new jobs.
Banking and financial services minister Shizuka Kamei was the first to move markets.
A former police official and anti-postal reform rebel, he was a surprise pick for that job with a lack of markets experience leaving analysts scratching their heads as to what he might do.
They did not have to wait long as Kamei said he would push for banks to freeze repayments of mortgages and small business loans.
That sent Tokyo banking shares down 1.9 percent as investors wondered what it would mean for lenders already struggling after the credit crunch.
But the bigger move came in the currency market where the new finance minister essentially endorsed the yen’s run-up to seven month highs against a U.S. dollar already tumbling in global markets.
Hirohisa Fujii has long argued that Japan must wean itself off relying so much on a low yen and exports to grow its economy — but on Wednesday he added that he was comfortable with the yen’s recent rise.
Markets promptly sent the yen up nearly 1 percent more against the sagging dollar, and his comments will likely hit the shares of exporters when the Tokyo stock market reopens on Thursday.
Perhaps these are just examples of the new government’s drive towards politicians making policy, rather than leaving things to the bureaucrats, and Japan will just have to get used to it.
Or perhaps the two ministers — both of whom have served in previous cabinets a long time ago — are adjusting to the difference between talking as opposition politicians and pronouncing as ministers with real power.
Photo credits (top to bottom): REUTERS/Chris Meyers; Kamei: REUTERS/Yuriko Nakao; Fujii: REUTERS/Issei Kato
