Japan Sticks With FX Chief Asakawa After Trump Tweets Currencies
(Bloomberg) -- Japan opted to keep a steady and experienced hand in charge of the yen amid renewed concern that foreign exchange is in the cross hairs of the Trump administration.
Masatsugu Asakawa will continue as Japan’s top currency official for a fourth straight year after a shuffling of top finance ministry officials announced Friday by the Cabinet Office. It is rare for one of Japan’s top bureaucrats to retain such a role for so long. If Asakawa stays for another full year, he will have worked in the post longer than current Bank of Japan Governor Haruhiko Kuroda, who previously held the position.
The appointment comes little more than a week since Donald Trump criticized China and the European Union for currency manipulation on Twitter. The comment reignited concern that the U.S. president might widen the scope of his battle against what he sees as unfair trade practices to include currency policy. The remark also prompted Japanese officials to express concern that Trump could renew previous criticism of the yen’s level against the dollar.
The vice minister for international affairs is Japan’s top financial diplomat. Asakawa will continue to be responsible for carrying out the government’s currency policy, keeping an eye on the yen, liaising with organizations like the International Monetary Fund and representing Japan at international gatherings like the Group of 20.
The finance ministry appointments follow the departure of top officials over scandals including the cut-price sale of land to Moritomo Gakuen, a school with links to Prime Minister Shinzo Abe and his wife Akie, and the resignation of Junichi Fukuda, previously the ministry’s top official, over allegations of sexual harassment.
Asakawa joined the finance ministry in 1981 after graduating from Tokyo University. He served current Finance Minister Taro Aso as his executive assistant during Aso’s stint as prime minister from 2008 to 2009. Asakawa also worked at the Organisation for Economic Co-operation and Development. He assumed his current role in July 2015.
He has shepherded the yen through periods of volatility linked to political turmoil, notably the U.K.’s surprise decision to leave the European Union and the election of President Donald Trump. When the yen briefly pushed through the level of 100 yen per U.S. dollar amid Brexit, he said that moves in the currency were very rough. The vice minister often intervenes verbally in foreign exchange markets when the finance ministry sees currency movements as excessively sharp or one-sided.
Nathan Sheets, chief economist at PGIM Fixed Income and Asakawa’s former counterpart at the U.S. Treasury, described him as a dogged negotiator capable of delving into small procedural details or debating broader philosophical points. Asakawa is Aso’s right hand man on a wide range of issues, he added.
Sheets worked with Asakawa on TPP negotiations, G-7 and G-20 agendas and "thorny issues surrounding exchange rate management and communication." While Asakawa vigorously defends Japan’s interests, he takes time to listen to colleagues, Sheets added. "This allowed us to have an unusually frank relationship. We both said what we thought without the usual diplomatic niceties."
The finance ministry announced several other changes among its top officials. Shigeaki Okamoto will become the next vice minister for administration, replacing Fukuda.
©2018 Bloomberg L.P.