For several months, the Central Bank of Japan had been leaderless, creating a situation that was politically and economically awkward.  Finally, after much debate, Masaaki Shirakawa, a former academic and veteran central banker, was appointed.  It is unclear what effect Mr. Shirakawa will have on Japan’s economy, which is foundering (for reasons unrelated to the global credit crunch).  He is considered highly competent, and analysts have suggested that he could help Japan develop a sensible and focused economic policy, which has been lacking for quite a while. With regard to monetary policy, he is unlikely to either raise or lower interest rates from the current level of .5%.  Thus, if he is to return Japan to economic credibility, he will have to use other methods. Nonetheless, analysts are optimistic. The New York Times reports:

Simply having a hand at the central bank’s tiller will do much to restore global confidence in Japan and its ability to manage its $5 trillion economy, economists and former bank officials said.

Read More: Japan Approves New Bank Chief