Image: Reutrs Berita 24 English - After an upper house election in July, Japan's search for a new central bank governor is expected to ...
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| Image: Reutrs |
Berita 24 English - After an upper house election in July, Japan's search for a new central bank governor is expected to heat up, and the outcome might influence how swiftly the country follows its worldwide peers in removing monetary support.
Prime Minister Fumio Kishida will choose a successor to Bank of Japan governor Haruhiko Kuroda, whose second five-year tenure ends in April next year, from a shortlist compiled by finance bureaucrats.
In March, two deputy governor positions will become available, currently held by professional central banker Masayoshi Amamiya and scholar Masazumi Wakatabe.
The following are some potential candidates for the position:
MASAYOSHI AMAMIYA - VERY STRONG GOVERNORAL CANDIDATE
Amamiya, who is currently deputy governor, has spent the most of his career at the central bank formulating monetary policy proposals and is known as "Mr. BOJ" for being the brains behind many of the bank's unconventional monetary easing schemes.
He was a crucial figure in the creation of Kuroda's massive asset-buying programme in 2013, and he has persistently advocated for ultra-low interest rates.
Amamiya, a classical music enthusiast, is recognised for his close relationships with legislators and bureaucrats, which enable him to predict which way the political wind is blowing when it comes to policymaking.
HIROSHI NAKASO - VERY STRONG GOVERNORAL CONTENDER
Nakaso, a professional central banker who served as deputy governor till 2018, was instrumental in the BOJ's exit from its first round of quantitative easing in 2006.
Nakaso, who has extensive experience handling the Bank of Japan's market operations and international affairs, has repeatedly warned of the dangers of extended monetary easing, such as the potential for market distortions in bond and money markets.
STRONG CONTENDER FOR GOVERNOR MASATSUGU ASAKAWA
Asakawa, like Kuroda, rose through the ranks of the finance ministry to become Japan's top financial diplomat in 2015, a position he held for four years while battling a high yen and negotiating with then-US President Donald Trump's administration.
After leaving the ministry, he became president of the Asian Development Bank in 2020, a position he held before becoming governor of the Bank of Japan.
Asakawa hailed Kuroda's stimulus programme in his book as a wise measure to combat deflation. He also stated that yen drops would be more difficult to halt via currency intervention than yen increases, because Japan's ability to sell foreign currencies to prop up the yen would be restricted by the extent of its foreign reserves.
CANDIDATES FOR THE DARK HORSE
The BOJ and the finance ministry have traditionally alternated filling the position of central bank governor, with each serving for only a single five-year term. When Kuroda was re-appointed to a second five-year term in 2018, this became public.
If history is any indication, the next governor of the Bank of Japan will come from the ranks of the central bank. However, there's a chance Kishida will go with a surprise choice.
Analysts have mentioned Columbia University professor Takatoshi Ito, who is close to Kuroda, and former top currency diplomat Takeo Nakao as possible candidates.
Given Kishida's close ties to the finance ministry, he may appoint a former top bureaucrat from the ministry, albeit no consensus exists on who might be among the strong possibilities.
POSSIBLE DEPUTY GOVERNOR SHINICHI UCHIDA
Uchida is a rising star who landed a rare reappointment for a second, four-year term as the BOJ's executive director overseeing monetary policy. A career central banker who spent most of his career at the elite monetary affairs department, Uchida is a rising star who landed a rare reappointment for a second, four-year term as the BOJ's executive director overseeing monetary policy.
Many observers believe his reappointment means he will be considered for one of the two deputy governor positions.
Uchida collaborated with Amamiya on many of Kuroda's measures, including the implementation of negative interest rates and yield curve control in 2016.
According to those who know him, Uchida is a fervent believer that the BOJ should keep monetary policy ultra-loose for the time being in order to reflate growth and tighten the labour market enough for wages to increase further.
POSSIBLE DEPUTY GOVERNOR TOKIKO SHIMIZU
Shimizu, the BOJ's executive director for foreign relations, is one of the few female central bankers to have worked her way up through the ranks of the male-dominated institution.
Shimizu is a dark horse possibility for deputy governor or maybe governor if Kishida desires more diversity in the BOJ leadership. Her career at the BOJ focused on foreign and market affairs rather than monetary policy.
There has never been a female BOJ deputy governor or governor.
