Elite bureaucrat becomes Japan's top currency official

Japan's Ministry of Finance on Tuesday named Naoyuki Shinohara, an elite bureaucrat and an expert on international finance, to its top post on currency policy.

Shinohara, 54, will replace Hiroshi Watanabe as vice finance minister for international affairs on July 10, the ministry said.

The change will make Shinohara one of the most closely watched Japanese policy makers in the currency markets. Vice finance ministers for international affairs work with finance ministers to decide when to intervene to push the yen higher or lower.

The personnel reshuffle, though, is part of regular changes in the ministry's senior positions and probably won't alter reluctance in recent years to intervene actively in the currency market.

Watanabe, for example, has not intervened in the currency market since he was appointed to the vice finance minister's post in July 2004. He is the first vice finance minister not to sell or buy the yen since it was floated in the early 1970s.

Shinohara isn't expected to deviate much from Watanabe's lead.

But Watanabe's predecessor, Zembei Mizoguchi, oversaw an unprecedented 35 trillion yen selling intervention during his tenure from January 2003 to July 2004 to protect the then-budding economic recovery from a sharp appreciation in the yen, which hurts Japan's key exporters.

Eisuke Sakakibara, who served the post between July 1997 and July 1999, also aggressively stepped into currency markets, which won him the nickname "Mr. Yen" in global financial markets.

Shinohara began his career at the ministry in 1975 after graduating from Tokyo University with a degree in economics. He also studied at Princeton University's Woodrow Wilson School in the late 1970s and speaks good English, ministry officials said.

The ministry also announced Tuesday that Hiroki Tsuda, a 58-year-old career bureaucrat who is currently the budget bureau chief, will replace Hideto Fujii as vice finance minister.