Tokyo, April 9 (Jiji Press)—Speculation is growing over who should succeed Bank of Japan Governor Kuroda Haruhiko, who has only one year to go before the end of his term on April 8, 2018.
The BOJ is unlikely to attain its 2% inflation target before his five-year term expires. Kuroda’s successor will take over not only the helm of the central bank but also his elusive task of achieving the target.
Once the target is met, the successor will face an even more difficult problem: how to realize a smooth exit from the unprecedented mix of unorthodox monetary policy measures including massive government bond purchases, negative interest rates and a long-term interest rate target.
“I have full trust in Governor Kuroda’s monetary policy,” Prime Minister Abe Shinzō told a House of Councillors Budget Committee meeting in January this year. “I hope this policy line will be firmly maintained.”
Abe’s words of endorsement, given when he was asked what kind of person is appropriate for the top central bank post, have strengthened speculation that Kuroda may be reappointed. Kuroda is already 72 years old, however, and would be 78 at the end of another stint at the BOJ helm. Some observers are voicing concerns that the heavy workload could prove too much for him to continue in this role.
Other officials in the central bank are being eyed as potential successors. They include Nakaso Hiroshi, a deputy governor with strong connections to his counterparts in financial regulatory organs overseas, and Amamiya Masayoshi, an executive director who has influenced the bank’s policy proposals to the government. Finance-industry watchers hope to see a steady hand on the wheel as the bank nears the phase when it must seek an exit to quantitative easing, which could threaten a spike in long-term interest rates if mishandled.
Potential candidates from outside the BOJ’s ranks include Ambassador to Switzerland Honda Etsurō, considered one of Prime Minister Abe’s leading economic advisors. Honda is a favorite among those in favor of the central bank’s reflationary policy, and input from the prime minister’s office is expected to carry particular influence givens desire for continued moves toward sustainable price rises and economic stability.
[Copyright The Jiji Press, Ltd.]