Japan appoints fiscal hawk Yano as finance ministry's top bureaucrat

By Tetsushi Kajimoto

TOKYO (Reuters) - Japan has appointed fiscal hawk Koji Yano, known for his close ties with Prime Minister Yoshihide Suga, as administrative vice minister at the Ministry of Finance - the ministry's top bureaucrat.

The appointment of Yano, currently the finance ministry's budget bureau chief tasked with compiling state budgets, was made as part of an annual personnel reshuffle, Finance Minister Taro Aso said on Wednesday.

It comes as Japan's fiscal management involves juggling pandemic-busting spending with efforts to curb the industrial world's heaviest public debt.

Yano, who will replace Mitsuru Ota, was Suga's secretary for three years from 2012 when Suga was the government's top spokesperson.

Suga has come under mounting pressure from politicians to boost pandemic spending ahead of a general election due later this year. Attention will be on how Yano guards against calls for large-scale fiscal stimulus while streamlining budget spending.

Yano is likely to lay the groundwork for meeting the elusive goal of achieving a primary budget surplus, excluding new bond sales and debt servicing costs, by fiscal 2025.

Last year, he worked to reduce the size of funds planned under Suga's administration - one targeting decarbonisation and one so-called university fund - out of concern about worsening public finances, people with knowledge of the matter previously told Reuters.

Yano is a graduate of Hitotsubashi University, one of Japan's top universities, in contrast to most elite bureaucrats at the ministry who are typically graduates of the more prestigious University of Tokyo.

Among other appointments, the ministry named international bureau chief Masato Kanda as its top currency official, who will lead Japan at Group of Seven and broader Group of 20 meetings.

Kanda is well versed in a range of policy issues and familiar with various policymakers at home and overseas, including Bank of Japan Governor Haruhiko Kuroda, who was the top currency official for three and a half years until early 2003.