Asia

Sunday, February 11, 2018 - 21:22

MNI: PRESS: Japan Govt Plans To Reappoint BOJ Governor Kuroda


TOKYO (MNI) - Prime Minister Shinzo Abe plans to reappoint Haruhiko Kuroda to a second five-year term as Bank of Japan Governor, allowing him to accomplish the thorny task of guiding low inflation to a stable 2% under the aggressive easing program launched in April 2013, Japanese newspapers reported during the weekend.

Abe has said he has confidence in Kuroda's leadership in reflating the economy.

The BOJ has said it will maintain massive asset purchases and super-low interest rates until it achieves the 2% inflation target but it also faces the need to fine-tune its policy stance as protracted easing is squeezing profit margins for lenders and reducing fixed-income investment returns for pension funds.

The government is expected to nominate Kuroda as the BOJ chief later this month so that both chambers of the Diet can approve the nomination before Kuroda's term ends on April 8, the press reports said.

Given the ruling coalition's majority in both houses, the re-nomination would likely to be approved easily.

If Kuroda, 73, were reappointed, he would become the first BOJ governor to serve two terms since Masamichi Yamagiwa, who held the post from 1956 to 1964.

Prime Minister Abe has said in parliamentary testimony that he has "complete trust" in Kuroda's skills as a central bank chief, based in part on his having served as a senior Ministry of Finance policymaker and having managed a large international organization.

In 2013, Kuroda cut short his term as the president of the Manila-based Asian Development Bank and returned to Tokyo to become BOJ governor.

There have been no press reports as to who will replace the two deputy governors, Kikuo Iwata, 73, a former economics professor, and Hiroshi Nakaso, 64, a career central banker. Their five-year terms end March 19.

The Prime Minister's Office is likely to look for candidates for the deputies, one from among university professors or government economists and the other from the central bank.

For the purpose of continuing large-scale easing, Masayoshi Amamiya, 62, appears to be among top candidates. Amamiya is the BOJ executive director in charge of monetary policy. He has been responsible for drafting many of the bank's monetary policy measures, including the policies on quantitative and quality easing and negative interest rates.

Another candidate may be Etsuro Honda, 63, a key economic adviser to Abe who is currently Japan's ambassador to Switzerland.

Honda was among the economics professors who advised Abe during the 2012 Lower House election campaign that returned Abe to power. Honda argued then that raising the amount of money available for economic activity through expansionary monetary and fiscal policies should correct the strong yen and help the nation overcome deflation, a policy approach Abe adopted.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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