The replacement for Bank of Japan (8301) Governor Masaaki Shirakawa, whose term ends in April, should be someone who shares the views and responsibilities of the government, a senior ruling party official said.
“It all comes down to whether the person can share the nation’s views and take upon challenges together,” Shigeru Ishiba, secretary general of the Liberal Democratic Party, said in a program on public broadcaster NHK today.
Prime Minister Shinzo Abe, who has called for “bold monetary policy” to end deflation and weaken the yen, has a chance to reshape the central bank when his government nominates successors to Shirakawa and his two deputies. The Bank of Japan last week decided to adopt a 2 percent inflation target and begin open-ended asset purchases next January.
Ishiba said a joint statement released by the central bank and the government after the Jan. 22 policy board meeting means that reviving economic growth is “something they are jointly responsible for.”
The government should present its choices for the three BOJ officials to parliament by the end of next month, LDP upper house parliamentary affairs chief Masashi Waki said on Jan. 21. The current deputies’ terms end in March. Abe’s nominees must win approval in the opposition-controlled upper house.
Among potential successors to Shirakawa are former Deputy Governor Toshiro Muto, who said in a Jan. 21 interview that no potential monetary step should be considered “taboo,” and Asian Development Bank President Haruhiko Kuroda, a former Finance Ministry currency official, who in 2002 advocated “innovative” BOJ policies and a 3 percent inflation target.
The yen has slid more than 7 percent in the past month, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, in anticipation that the central bank will join Abe’s administration in strengthening measures to lift the economy.
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