Haruhiko Kuroda, the Asian Development Bank president who supports the bold monetary easing advocated by Prime Minister Shinzo Abe, has emerged as the leading candidate for the next Bank of Japan governor, sources said.
Kuroda, 68, a former vice finance minister for international affairs, also boasts a network of personal connections in international finance, according to the sources in the Finance Ministry and the Cabinet secretariat.
“Kuroda is the front-runner,” a source said Feb. 22.
BOJ Governor Masaaki Shirakawa and his two deputies will retire on March 19. The government is expected to nominate successors next week. The three BOJ leaders will be appointed after approval by the two Diet chambers.
Kuroda aggressively intervened in foreign exchange markets to stem the yen’s rise when he was responsible for currency policy as vice finance minister for international affairs between 1999 and 2003.
He has also called on the BOJ to adopt an inflation target to loosen credit since his time at the Finance Ministry.
Abe discussed what he expects from the next BOJ governor at a Diet session on Feb. 20.
“(We want) someone who can articulate (Japan’s policy) in the inner circle of international finance and win understanding (from foreign countries),” he said. “Someone who can use theory to counter criticism against monetary policy is needed.”
Abe’s economic policy has drawn criticism from abroad that it is designed to artificially weaken the value of the yen. Many government officials believe that Kuroda, with his overseas connections and language skills, will be able to win foreign understanding for Abe’s policy.
But government officials are also worried whether a Japanese succeeds Kuroda as ADB president when he resigns before his term expires in 2016.
The ruling coalition of the Liberal Democratic Party and New Komeito does not hold a majority of seats in the Upper House, and it needs opposition support for the BOJ appointments.
Your Party, a small opposition force, is opposed to the appointment of a former Finance Ministry bureaucrat, but the Democratic Party of Japan is not.
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