Bank of Japan Governor Toshihiko Fukui, under public pressure to resign over what many see as a mishandling of personal finances, said on Friday he wanted to stay at his job and restore faith in the central bank.
Fukui's judgement and ethical standards have been called into question since he revealed he invested 10 million yen ($87,000) years ago in a fund run by financier Yoshiaki Murakami, who was indicted on Friday for insider trading.
Fukui made the investments while working in the private sector but had kept the investments, along with shares in five companies, after becoming central bank governor in 2003.
The government has backed Fukui - seen as one of the most able central bank chiefs Japan has had in years - and Prime Minister Junichiro Koizumi said on Thursday Fukui had done a great job since he became governor.
But analysts said Fukui's situation could become precarious if public outrage over the affair did not dissipate, and speculation that he might decide to go has been a factor weighing on the yen.
Although recent comments by BoJ officials have dovetailed with market expectations for the central bank to raise interest rates as early as July, they said the yen could be further pressured if the controversy persists. "I think the government side wants to quickly put an end to this issue but it looks like it could drag on," said Daisuke Uno, market strategist at Sumitomo Mitsui Banking Corp.
Appearing before a parliamentary committee for a second day in a row, Fukui apologised again for upsetting the public but said he wanted to stay on as governor.
"I am sorry for betraying the public's trust and will make amends," Fukui told the upper house committee questioning him over his investments. "But my feelings to continue fulfilling my responsibilities of my job are unchanged," he said.
At the request of opposition party lawmakers, Fukui will submit a report giving more details of his personal finances to a parliamentary panel next Tuesday, parliamentary officials said.
His report will disclose how much he earned other than his regular salary and the outstanding amount of his financial assets since 2003. He is not scheduled to appear before the panel. Recent polls showed about half of the public thought Fukui should resign.
A poll by Kyodo news agency on June 17-18 showed 49 percent of those surveyed thought he should resign, against just 13 percent who saw no reason for him to bow out. In an Internet survey by the Yomiuri newspaper published on Thursday, 40 percent of respondents said Fukui should quit. Fukui has said he had not broken the BoJ's rules.
But public criticism of Fukui intensified further this week after he said his money in the fund had more than doubled in value since 1999, despite his earlier comments that his profit was not a big sum.
Questions have also been raised about why Fukui decided to withdraw from the fund in February, just before the BoJ scrapped its super-loose monetary policy in March and at a time when there was speculation Murakami might face legal problems.
Fukui, who invested in the fund in 1999 when he was working at a private think tank, has said his prime motive was not to make a profit but to support Murakami's ideas about improving corporate governance and shareholders' rights in Japan.
Murakami, a former trade bureaucrat, was indicted by Tokyo prosecutors on Friday on charges of insider trading in a deal involving scandal-hit Internet firm Livedoor Co.