Bank of Japan Gov. Haruhiko Kuroda set to serve 2nd term
TOKYO (AP) — Bank of Japan Gov. Haruhiko Kuroda was nominated Friday to serve a second five-year term as the head of the central bank.
The proposal Friday to a parliamentary committee was expected to gain approval before Kuroda’s term expires at the end of March. It was made along with a batch of government appointments and re-appointments proposed by the government.
A finance ministry veteran, Kuroda has spearheaded an effort to spur growth through what he has called a “big bazooka” of monetary stimulus.
Prime Minister Shinzo Abe has relied heavily on Kuroda’s deflation-fighting strategy of massive asset purchases by the central bank.
The effort has helped Japan attain eight straight quarters of growth in the longest expansion since the country’s economic bubble collapsed nearly 30 years ago. But despite that unprecedented level of stimulus and a negative interest rate policy that is keeping credit ultra-cheap, the 2 percent inflation target they set nearly five years ago remains distant and growth has remained lackluster.
By re-appointing Kuroda, 73, Abe is signaling the government’s commitment to those policies while at the same time pushing for wage hikes from industries that have been reluctant to spend more now that Japan’s population is declining.
In that sense Japan’s monetary policies contrast with those in Europe and the U.S., where the Federal Reserve has gradually begun to raise interest rates. The challenge for Kuroda, many in Japan believe, will be in finding ways to ease out of the BOJ’s current stimulus regime without disrupting markets given its outsized holdings of Japanese government bonds.
Kuroda moved to the central bank from the Asian Development Bank in 2013 and has led efforts to cope with various financial crises in the region during his long career.
A fluent English speaker, Kuroda holds a master’s degree from Oxford University.
AP Business Writer Elaine Kurtenbach contributed to this report.