finance

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BOJ Governor contributes 10 million yen to Murakami fund

It was revealed that Bank of Japan Governor Fukui Toshihiko in 1999 invested 10 million yen in the Murakami Fund, an investment management firm led by Murakami Yoshiaki who was arrested on suspicion of insider trading.

Fukui, who assumed the governorship in 2003, has not yet withdrawn from the investment. The revelation came out at the House of Councilors Financial Affairs Committee meeting on June 13.

Commenting on ties between the BOJ governor and the Murakami Fund, Japanese Communist Party Chair Shii Kazuo on the same day said, "The Murakami insider trading scheme violated financial rules and order. The BOJ governor should be held politically and morally responsible for his involvement."

At the committee meeting, JCP representative Daimon Mikishi criticized such a close relation between the BOJ governor who presides over monetary policy and a specific investing firm as "unprecedented."

Daimon pointed out that the rapid growth of investment firms such as Murakami Fund has been prompted by the BOJ's quantitative easing policy.

He also revealed that Fukui was a member of the advisory board for the Murakami Fund, acting as a walking billboard to raise money for the Fund.

Daimon asked Fukui why he did not withdraw his contribution in the Fund when he became the BOJ governor in 2003.

Fukui answered that it was because he "had a sense of fellowship with Murakami."

Imamiya Kenji, an expert of financial issues and professor emeritus at Chuo University, said, "The BOJ continues the zero-interest policy. As a result, money games have become rampant in the stock market with an abundant supply of money. The BOJ created an environment to favor those who commit dishonest and illegal activities such as by the Murakami Fund."
- Akahata, June 14, 2006