Ja­pan’s PM nom­i­nates Kuroda as next BOJ chief

The Pak Banker - - FRONT PAGE -

Ja­panese Prime Min­is­ter Shinzo Abe nom­i­nated Asian Devel­op­ment Bank Pres­i­dent Haruhiko Kuroda to lead the na­tion’s cen­tral bank, rais­ing the like­li­hood of fur­ther mon­e­tary stim­u­lus this year.

Kikuo Iwata, a pro­fes­sor at Tokyo’s Gakushuin Univer­sity who ad­vo­cates greater government over­sight of the Bank of Ja­pan, and BOJ Ex­ec­u­tive Di­rec­tor Hiroshi Nakaso were nom­i­nated for the two deputy gov­er­nor po­si­tions, the na­tion’s par­lia­ment said in a state­ment to­day.

Haruhiko Kuroda, pres­i­dent of the Asian Devel­op­ment Bank (ADB), ad­vo­cated an in­fla­tion tar­get more than a decade be­fore the cen­tral bank adopted one in Jan­uary, and said this month that ad­di­tional eas­ing can be jus­ti­fied for 2013.

The regime change may tilt Ja­pan’s cen­tral bank to­ward a more ex­pan­sion­ary mon­e­tary pol­icy as Abe calls for a 2 per­cent in­fla­tion tar­get to be reached as soon as pos­si­ble. The yen has fallen about 11 per­cent against the dol­lar in the last three months as in­vestors as­sess the pos­si­bil­ity of a shift in the BOJ’s stance, with JPMor­gan Chase & Co. say­ing that the new lead­er­ship could im­ple­ment more stim­u­lus as early as April.

“Ex­pec­ta­tions are high, and mar­kets won’t be sat­is­fied with just an ex­ten­sion of cur­rent poli­cies,” said Masamichi Adachi, se­nior econ­o­mist at JPMor­gan in Tokyo. “The new lead­er­ship has to show it is dif­fer­ent from the pre­vi­ous regime.”

Kuroda, 68, ad­vo­cated an in­fla­tion tar­get more than a decade be­fore the cen­tral bank adopted one in Jan­uary, and said this month that ad­di­tional eas­ing can be jus­ti­fied for 2013.

The first pol­icy meet­ing for the new lead­er­ship is sched­uled for April 3-4, af­ter Shi­rakawa’s last meet­ing as gov­er­nor on March 6-7. The deputy gov­er­nors leav­ing are Kiy­ohiko Nishimura and Hiro­hide Ya­m­aguchi. The yen ex­tended its de­cline for the month on spec­u­la­tion Kuroda will pur­sue in­creased stim­u­lus, and was 0.2 per­cent lower at 3:47 p.m. in Tokyo. Shi­rakawa helped avert dam­age to Ja­pan’s fi­nan­cial sys­tem dur­ing the 20072009 global credit cri­sis and in the af­ter­math of Ja­pan’s record March 2011 earth­quake, while fail­ing to de­feat de­fla­tion. A gauge of con­sumer prices ex­clud­ing fresh food and en­ergy has been neg­a­tive ev­ery month since Jan­uary 2009.

The cen­tral bank in Jan­uary an­nounced that it will shift to ope­nended as­set pur­chases start­ing next year, with no ad­di­tional stim­u­lus for 2013. Cur­rently, the cen­tral bank buys se­cu­ri­ties.

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