Japan parliament OKs Kuroda as BOJ chief
AFP and APTOKYO -- Japan's parliament Friday approved a new central bank management team that is widely expected to back government demands for more policy action to stoke the world's third-biggest economy.
March 16, 2013, 12:06 am TWN
The upper house gave the green light to Haruhiko Kuroda as Bank of Japan (BOJ) governor, with the finance veteran and long-time BOJ critic seen as likely to launch aggressive monetary easing measures, after his predecessor drew heavy criticism for failing to turn around Japan's fortunes.
Lawmakers also approved Kikuo Iwata and Hiroshi Nakaso as Kuroda's deputies, with all three clearing the vote hurdle by comfortable margins despite warnings from Japan's leading opposition that it opposed Iwata.
The university economics professor is a strong supporter of monetary easing and of giving Tokyo more control over the BOJ, a touchy subject at the independent central bank.
The BOJ's new management team, which was approved by the lower house on Thursday, is set to take up their positions next week with the focus now squarely on their first policy meeting next month.
Prime Minister Shinzo Abe nominated the 68-year-old Kuroda, viewing him as a kindred spirit likely to back the premier's prescription of big spending and aggressive monetary easing to drag Japan out of years of deflation which has crimped private spending and corporate investment.
Kuroda has vowed he would do “everything possible” to reverse years of falling prices, while criticizing previous BOJ administrations for failing to fix the problem.
The BOJ's asset purchase policy is similar to the U.S. Federal Reserve's unlimited monthly bond-buying scheme, known as quantitative easing. The new BOJ chief has also ruled out purchases of foreign bonds to stoke the economy.
Approvals by the lower house on Thursday and by the upper house Friday morning only allow Kuroda to stand in for current Bank of Japan Gov. Masaaki Shirakawa after he steps down on March 19, three weeks before his five-year term was due to end. Another vote is required to make his appointment permanent.
The outspoken Abe clashed with Shirakawa on policy matters, previously warning that he might change a law guaranteeing the bank's independence if it did not follow his policies, stirring protests from central bankers abroad.
On Friday, Shirakawa took a jab at expected plans for more BOJ easing, saying that pumping more money into the banking system alone would not push up prices without structural changes to the economy.
“It's like punching the air,” he was quoted by Dow Jones Newswires as saying.
Also Friday, Japan's government upgraded its assessment of the economy for the third straight month in March, good news after revised growth data showed the country eased out of recession in the last quarter of 2012.