Amamiya received offer to head Bank of Japan
2023.02.06 08:46
Amamiya received offer to head Bank of Japan
By Kristina Sobol
Budrigannews.com – According to a newspaper on Monday, citing unidentified sources from the government and the ruling party, the government of Japan has spoken with Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya about taking over as governor of the central bank from incumbent Haruhiko Kuroda.
In an interview with reporters later on Monday, Prime Minister Fumio Kishida indicated that no final decision had been made and that he would continue to consider the best candidate for the position.
The delicate task of normalizing the BOJ’s ultra-loose monetary policy, which is receiving increasing public criticism for distorted market function, will fall on the next governor.
A vocation national financier who has drafted a large number of the BOJ’s money related facilitating devices, Amamiya has been seen by business sectors as a force to be reckoned with to take over as next lead representative.
He is seen by many analysts as a pragmatic policymaker who would rather walk cautiously toward any exit than abruptly alter a stimulus program that he helped create.
Senior Moody’s economist Stefan Angrick (NYSE:) According to analytics, Amamiya’s appointment as governor would indicate policy continuity.
Angrick stated, “A BOJ under his leadership would not rush toward tightening.” The control of the yield curve would be reduced, but a genuine rate rise would still be contingent on stronger wage growth and demand.”
Since the coalition in power currently holds a substantial majority, the government’s nomination is likely to be presented to parliament next week and will take effect upon approval from both houses.
It was not stated in the Nikkei report whether Amamiya had accepted the offer. According to Jiji news agency, when reporters inquired about whether he had been sounded out, Amamiya declined to comment.
At a news conference, Deputy Chief Cabinet Secretary Yoshihiko Isozaki said that the report that the government had interviewed Amamiya for the top BOJ position was false.
The pace at which the central bank can begin to phase out its massive stimulus will likely be affected by Kishida’s selection of a successor to Kuroda, whose five-year term will end on April 8.
On March 19, the five-year terms of the deputy governors Amamiya and Masazumi Wakatabe will also expire.
Following the Nikkei report, the dollar reached 132.60 yen, surpassing the 132 level for the first time since January 12. After the remarks made by Kishida and Isozaki, it lost some of its gains and ended up up 0.5 percent at 131.84 yen.
The BOJ’s leadership change occurs as inflation and rising global interest rates put Kuroda’s radical stimulus program to the test.
In December, inflation reached 4%, exceeding the BOJ’s target of 2%. This caused bond yields to rise and tested the BOJ’s resolve to uphold a policy that caps the yield on 10-year bonds at 0.5 percent.
Many investors are betting that the Bank of Japan will begin raising interest rates under the leadership of the person who will succeed Kuroda, who was dovish.
Markets think that Amamiya is more dovish than other candidates like Hiroshi Nakaso and Hirohide Yamaguchi, two former deputy governors.
He was known as “Mr. BOJ” because he came up with many of the bank’s unconventional monetary tools. In 2013, he was a key part of writing Kuroda’s asset-buying program.
Amamiya, on the other hand, is regarded as someone who is able to adapt policy in a flexible manner, including by interpreting the political winds.
Amamiya stated in July that the BOJ must “always” consider the means of exiting ultra-loose monetary policy while consistently advocating for rates to remain extremely low.
One of the individuals stated:
“I think Mr. Amamiya knows well the need to phase out stimulus at some point, albeit very carefully.”
