The Upper House led by the Democratic Party of Japan has rejected the nomination of Mr. Koji Tanami, governor of the Japan Bank for International Cooperation, as the next chief of the Bank of Japan. Appointments at the BOJ leadership require approval of both houses of the Diet. The rejection Wednesday came on the same day that the tenure of BOJ governor Mr. Toshihiko Fukui expired. Thus the top post at the central bank will remain vacant awhile at a time when global financial markets have been roiled by the U.S. subprime mortgage crisis. This not only deals a political blow to Prime Minister Yasuo Fukuda but also damages the credibility of the BOJ.

On March 12, opposition forces in the Upper House voted down the government's initial choice of a successor to Mr. Fukui: BOJ Deputy Governor Mr. Toshiro Muto. They said Mr. Muto's career background as a former vice finance minister could weaken the BOJ's appearance of independence from the government. Mr. Fukuda then nominated Mr. Tanami, also a former vice minister. Mr. Tanami was involved in tax reform and coordination of economic policies but is not well versed in international financial affairs. Given this career background, Mr. Fukuda could have foreseen that the DPJ-led Upper House would turn down Mr. Tanami's nomination, but the prime minister went ahead with his plan. His decision has left the impression that he would like to see the BOJ operate in close coordination with the Finance Ministry.

Clearly, Mr. Fukuda made a mistake, but this does not absolve both the ruling and opposition camps of their responsibility to agree as soon as possible on the appointment of the next BOJ governor. Regrettably, neither camp appears to feel a sense of crisis over the vacancy at the top post of the central bank. They should stop blaming each other for delays and instead discuss in earnest what kind of person is best for the job.