TOKYO- The decision over who will be the Bank Japan’s next chief will likely focus on two career central bankers whose different policy approaches and track records could affect the timing of an eventual exit from ultra-easy monetary policy.
As former and incumbent deputy governors, Hiroshi Nakaso and Masayoshi Amamiya have deep expertise in central bank affairs, which makes both of them a safe pair of hands in guiding a future exit from ultra-low interest rates, however distant that may be.
Long touted as front-runners in the BOJ leadership race, neither would rush into tightening monetary policy given Japan’s fragile economy and the need to keep low the cost of funding its huge public debt, say five former and incumbent policymakers who have worked with or under them.
But the two could differ on how soon the BOJ should roll back a complex framework of policies that combine huge asset buying, negative short-term interest rates and a 0 percent yield cap that makes Japan an outlier amid a global scramble to raise rates, they say.
“Nakaso belongs to a camp that believes central banks should not intervene too deeply in markets, while Amamiya appears more flexible,” said NobuyasuAtago, a former BOJ official who is now chief economist at Ichiyoshi Securities.
“The key difference lies in their views on how far central banks should stretch the boundaries of monetary policy.”
Prime Minister Fumio Kishida’s selection of a successor to BOJ governor Haruhiko Kuroda, whose term ends in April next year, is likely to intensify after an upper house election in July. — Reuters
