“The Bank of Japan (8301) may add monetary stimulus as early as April as prospective governorHaruhiko Kuroda looks to demonstrate a more aggressive approach to tackling 15 years of falling prices.
Kuroda, the current Asian Development Bank president, would take office after Governor Masaaki Shirakawa retires March 19, if confirmed by Parliament following his official nomination yesterday. Analysts at banks from Nomura Holdings Inc. to Mizuho Securities Co. see more easing as soon as an April 3-4 meeting.
Given a jump in Japanese stocks and slide in the yen in recent months in anticipation of greater stimulus under the new leadership, any failure to move in April risks disappointing investors, ex-Bank of England central banker Adam Posen said this week. With a third-straight fall in consumer prices in January showing the scale of his challenge, Kuroda may seek to adjust the timing, size and type of assets the BOJ buys.
“The party has just started,” said Masaaki Kanno, chief Japaneconomist at JPMorgan Chase & Co. in Tokyo, who in January predicted that Kuroda would get the job. “Give us more alcohol and get us excited — he will do that,” Kanno said of Kuroda, predicting that the bank’s open-ended bond purchases –currently scheduled to begin in January — will be brought forward to May or June.
Kanno’s analogy refers to a comment credited to former Federal Reserve Chairman William McChesney Martin equating tighter monetary policy with removing the punch bowl at a party….”
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