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Joined Nov 11, 2007
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Samurai Abe to Elect Dovish Cabinet Members

“Japanese Prime Minister Shinzo Abe is likely to nominate Asian Development Bank President Haruhiko Kuroda as Bank of Japan governor, according to two officials with knowledge of the discussions.

Abe is also likely to tap Kikuo Iwata, an academic who has urged a ramping up in Japan’s monetary base to end deflation, and Hiroshi Nakaso, a senior BOJ official, as deputy governors, according to one government official and a ruling coalition executive, who asked not to be named as the talks are private. Finance Minister Taro Aso lauded Kuroda in remarks to reporters today. The yen fell and Japanese stocks rose on the plans.

The picks would raise the odds of further BOJ stimulus after Kuroda, 68, who advocated an inflation target more than a decade before the bank adopted one in January, said this month additional easing can be justified for 2013. Iwata briefed Abe on monetary policy and the economy during his stint in opposition, when he decided to make reflation the main plank of his campaign for the Liberal Democratic Party to retake power.

“Kuroda has a degree of credibility, having been there relatively early” with arguing for an inflation target, said Richard Jerram, chief economist at Bank of Singapore Ltd., who has analyzed the Japanese economy since the 1980s bubble years. “The end of a toleration of deflation” means the nation is at an inflection point, where growth could return to 1 percent to 2 percent a year as real interest rates are brought down, he said….”

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