Sun. Apr 14th, 2024

Japan on Thursday nominated Asian Development Bank chief Haruhiko Kuroda as the next governor of the Bank of Japan, a key post in Tokyo’s bid to overhaul the economy.


Tokyo nominates ADB head, Bank of Japan chief, forex markets
Asian Development Bank president Haruhiko Kuroda, shown November 29, 2011. Haruhiko Kuroda, set to be tapped as the next head of the Bank of Japan on February 28, 2013, is a finance veteran who has long pushed for the kind of monetary easing demanded by Japan’s new government to stoke growth.

Kuroda, 68, was named along with two deputies — Kikuo Iwata, an economics professor at Tokyo’s Gakushuin University, and Hiroshi Nakaso, the BoJ’s executive director, the government said.

The nominations, which must be approved by parliament, sent the yen lower against the dollar and euro after two days of gains.

They come as Prime Minister Shinzo Abe’s administration has leaned on the central bank to further loosen its monetary policy and help realise a goal of stoking growth in Japan’s deflation-plagued economy.

Such moves have led to criticism that Tokyo is intentionally pushing down the yen’s value and risking a global currency war as rival nations race to gain a trade advantage.

Shortly before the announcement, Chief Cabinet Secretary Yoshihide Suga told reporters that “the people we will present (to the parliament) today will play the role of helmsmen for the ‘bold monetary policy’ that the prime minister is pursuing”.

His comments suggest the nominees are expected to fall in line with Tokyo’s plans, after Abe sparred over policy with outgoing BoJ chief Masaaki Shirakawa who is stepping down on March 19, three weeks before the end of his term.

Japan’s premier, who swept to power in December elections, warned Shirakawa that he could change a law guaranteeing the bank’s independence if it did not follow his policy of big spending and aggressive monetary easing.

Kuroda, a longtime critic of the central bank, is known as an advocate of loosening the monetary reins to overcome slow growth, putting him squarely in Abe’s policy camp.

On forex markets the dollar rose to 92.38 yen from 92.16 yen in New York late Wednesday, while the euro bought 121.34 yen, compared with 121.07 yen.

Kuroda spent decades as a Japanese finance ministry bureaucrat and was responsible for international affairs and foreign exchange policy between 1999 and 2003. He assumed the top job at the Manila-based ADB in 2005.

On Tuesday, Fed chief Bernanke said the US central bank would stick to its loose monetary policy to help put the world’s largest economy back on track.

But Bank of England Governor Mervyn King said this week that easing alone was no cure-all, although the BoE has in the past launched similar measures to prop up Britain’s recession-hit economy.

Source: AFP

By vivian