Japanese Govt. To Present Nominees For BoJ Top Jobs On February 10

Japanese government is set to present its nominees for the new Bank of Japan Governor and two deputy chiefs on February 10, reports said Tuesday, citing unnamed government and ruling party officials.

The Japanese parliament convenes on January 23.

There is also the likelihood of the date of presenting nominees being pushed forward by several days depending on developments in the parliament, reports said citing an unnamed official.

Present BoJ Governor Haruhiko Kuroda’s term ends on April 8. He had become the central bank chief in 2013.

His two deputies, Masayoshi Amamiya and Masazumi Wakatabe, are set to step down on March 19.

Amamiya and, former deputy governors Hiroshi Nakaso and Hirohide Yamaguchi are leading the race to be the next BoJ chief.

Bank of Japan’s new chief is widely expected to review the current inflation target of 2 percent under the policy accord with the government, which was crafted in 2013. The target would likely be made more flexible, Kyodo reported.

Kuroda presided over a decade of ultra-loose monetary policy to tackle chronic deflation, and to match the “Abenomics” plans of the former prime minister Shinzo Abe, which were intended to boost the economy.

The central bank is set to review the side-effects of its massive monetary easing during the policy session on January 17 and 18, and may make additional policy adjustments to correct the distortions in the yield curve, the Yomiuri Shimbun newspaper reported last week.

The BoJ board is set to announce the latest policy decision on Wednesday. In US time, the decision is due at 10:00 PM EST on January 17.

In the December monetary policy session, the nine-member board unexpectedly decided to expand the range of the 10-year JGB yield fluctuations to 0.5 percentage points from 0.25 percentage points.

Despite the surprise tweak to the yield curve control, or YCC, last month, the market functioning has improved little.

In this week’s meeting, policymakers are set to examine if market distortions can be corrected through adjustments in the purchase volume of government bonds, the newspaper reported.

The bank is also expected to raise the forecast for consumer price inflation ex-fresh food to 1.6 percent for fiscal 2023 and to 2 percent or above for fiscal 2024, citing the rising raw material prices for a wide range of goods.

Inflation in Japan’s capital Tokyo hit 4 percent for the first time in four decades at the end of 2022, official data revealed last week, raising speculation over a shift in the BoJ’s ultra-loose policy stance.

Rising inflation has prompted calls for wage hikes to help the public cope with the consequent climb in the cost of living.

Japanese Premier Fumio Kishida and BoJ Governor Kuroda urged companies to raise salaries in recent weeks as official data revealed that wages declined at the sharpest pace in 8 years in November.

Fast Retailing, the owner of the Japanese fashion retailer Uniqlo, said last week that it will raise salaries by 40 percent from March 2023, a move that could set a trend for the Japan Inc.

Nominees for the BoJ top jobs are traditionally summoned to the parliament for hearings where they describe their views on monetary policy and answer questions from lawmakers.

Hearings are reportedly planned to be conducted on February 16-17 in the lower house of the parliament and on February 20-21 in the upper house.

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