Abe pledges no letup in monetary easing driveJapan’s Prime Minister Shinzo Abe vowed to push ahead with more aggressive monetary easing as he yesterday nominated Haruhiko Kuroda to head the country’s central bank.
The current Bank of Japan governor, Masaaki Shirakawa, will step down on March 19, three weeks before his term is due to end. The nomination to parliament Thursday of 68-year-old Kuroda, an Oxford-educated former vice minister of finance, was widely expected. He is president of the Asian Development Bank. A vote on Kuroda’s appointment is due next month.
Abe is counting on Kuroda’s support to help Japan escape from a long, debilitating bout of deflation that he says is hindering consumer spending and corporate investment.
Bolder monetary easing is one of Abe’s “three arrows’’ or strategies, for helping salvage the ailing economy.
In a parliament speech yesterday, Finance Minister Taro Aso vowed more drastic measures to revive growth.
“Deflation is a deep-rooted problem that has undermined the Japanese economy’’ as it has “hampered investment toward the future,’’ said Aso, noting that Japan is not the only country grappling with weak demand and an aging population.
Kuroda has criticized central bank policies in the past. His perceived alignment with Abe’s views on the economy has added to worries that the Bank of Japan’s independence could be undermined. Central bank autonomy, which aims to ensure monetary policy decisions aren’t captive to the short-term considerations of political leaders, is enshrined in law in many countries.