Fukui, Toshihiko

▪ 2005

      Toshihiko Fukui, governor of the Bank of Japan (BOJ), marked a full year on the job in March 2004 with all signs pointing toward a solid economic recovery for Japan following years of recession. During the preceding 12 months, the Nikkei-225 Stock Average had risen 47%—its best annual performance in 31 years—and during the final quarter of 2003, the Japanese economy had posted a robust 6.4% annualized gain, the best quarterly performance in more than a decade. Employment numbers were also up; export rates were growing; and the Japanese yen was trading at its highest level in four years. Much of the credit for the long-awaited turnaround went to Fukui, who had risked implementing a series of unorthodox monetary policies in order to combat the lingering malaise. His success had prompted some observers to dub him “the Alan Greenspan of Japan.” In its praise of the BOJ chief, The Economist magazine simply declared Fukui “the world's best central banker.”

      Fukui was born on Sept. 7, 1935, in Osaka, Japan. He earned a law degree from the University of Tokyo in 1958 and upon graduation embarked on a long career with the BOJ. Over the next 40 years, he was appointed to a succession of increasingly responsible positions, including general manager of the Takamatsu branch in 1980, director-general of the banking department in 1986 and of the Policy Planning Office in 1989, and deputy governor of the central bank in 1994.

      As BOJ deputy governor, Fukui was widely viewed as the successor-in-waiting to the governor, Yasuo Matsushita, but in 1998 both men resigned their posts to take responsibility for a scandal involving a senior BOJ official. The official had been arrested for leaking market-sensitive information to financial institutions in exchange for lavish gifts. Fukui subsequently accepted the chairmanship of the Fujitsu Research Institute, a private think tank. In 2001 he was named vice-chairperson of Keizai Doyukai (the Japan Association of Corporate Executives). Prime Minister Junichiro Koizumi selected Fukui to replace retiring Masaru Hayami as BOJ governor in March 2003.

      Koizumi's appointment of a career bureaucrat like Fukui was derided by some critics who thought that the post should go to someone with more of a reformist image. Fukui proved quickly, however, that he was more than open to reform, implementing a number of radical policies and taking an approach that one economist described as “activist and interventionist.” One of Fukui's more unorthodox policies involved “monetary easing”—in effect, flooding the markets with cash in part through increased stock buys from commercial banks. The move had its intended effect, greatly slowing the deflationary pressures that had been blamed for much of Japan's economic malaise. Fukui was pleased with the positive signs but remained cautious in his outlook, warning that it would take more time before the economy had fully recovered.

Sherman Hollar

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