Japan’s PM nominates Kuroda as next BOJ chief

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.