Japan’s government on Friday reappointed Bank of Japan Governor Haruhiko Kuroda for another term and chose an advocate of bolder monetary easing as one of his deputies, a potent signal to financial markets that the bank will be in no rush to turn off its massive stimulus program.
Below are profiles of Kuroda and his two new deputies. The nomination needs approval by both houses of parliament to be effective, which is a near certainty as the ruling coalition holds a comfortable majority.
HARUHIKO KURODA, 73, GOVERNOR
A former Japanese top currency diplomat who also served as head of the Asian Development Bank, Kuroda became governor in 2013 with a mandate from premier Shinzo Abe to deploy a radical stimulus program to pull Japan out of deflation.
Known as a workaholic, he has endured the gruesome job involving roughly twice a month of overseas travels and regular trips to parliament to answer questions from lawmakers.
He is known to have an excellent network of overseas counterparts, befriending top policymakers and central bankers including former Federal Reserve Chair Janet Yellen.
The choice of Kuroda is a sign the BOJ will be in no rush to withdraw monetary support, but also won’t ramp up stimulus easily given the rising cost of prolonged easing, especially the hit to bank profits.
MASAZUMI WAKATABE, 52, DEPUTY GOVERNOR
A professor at Waseda University, Wakatabe is known as a vocal advocate of aggressive monetary easing to fire up inflation. He has called for accelerating the BOJ’s asset buying, which would require reversing a decision made in 2016 to abandon a target for asset purchases.
Wakatabe told Reuters in December it was “dangerous” for the BOJ to consider modifying its ultra-loose monetary policy now, and that the central bank should instead ramp up monetary support.
He has also called for bolder fiscal spending. He told the Nikkei daily last November the ideal way to banish deflation was to postpone the scheduled sales tax hike in 2019 and deploy a powerful mix of fiscal and monetary stimulus measures.
MASAYOSHI AMAMIYA, 62, DEPUTY GOVERNOR
A veteran central banker who has spent his entire career at the BOJ, Amamiya currently oversees the bank’s division charged with drafting monetary policy.
Amamiya has cultivated a reputation as a highly creative and flexible central banker. Some inside the BOJ once dubbed his approach “Amamimya magic” because of his ability to communicate with Japan’s demanding lawmakers, and his expert crafting of ingenious solutions to the BOJ’s many problems.
Amamiya played a key role in designing the nuts and bolts of quantitative easing and yield curve control. He also worked very closely with Kuroda to expand quantitative easing in 2014.
Choosing Amamiya could signal a continuation of Kuroda’s policies. He could also inspire confidence in the BOJ to handle the tricky technical details behind a policy overhaul or a straight exit from quantitative easing.