politics

Aso praises BOJ's Kuroda, raises expectations of reappointment as governor

7 Comments

Japanese Finance Minister Taro Aso has hailed the achievements of Bank of Japan Governor Haruhiko Kuroda, raising expectations that the central bank chief will be reappointed when his five-year term ends in April.

Kuroda embarked on an unprecedented burst of monetary stimulus since Prime Minister Shinzo Abe handpicked him a few months after he swept to power in December 2012, pledging to pull Japan out of nearly two decades of stagnation and deflation.

Since then the yen has weakened as a result of monetary easing, helping boost exports and employment, Aso said.

Aso echoed the view Abe who said on Wednesday that he had full confidence in Kuroda's ability as central bank governor.

The comments by both Aso and the premier backed market expectations that Kuroda is likely to be reappointed even though the premier said that nothing has been decided.

Aso also made no mention of who should succeed Kuroda.

"He has overhauled the Bank of Japan's monetary policy and eased policy, as a result the yen has fallen from around 80 yen to some 113 yen, which has improved export conditions for Japanese firms," Aso told reporters after a cabinet meeting when asked about Kuroda.

That has helped companies earn record profits and improve employment and household income conditions, he said.

"Coordination between fiscal and monetary policies has worked well."

Abe also instructed Aso to put a decisive end to deflation, revive the economy and tackle fiscal consolidation, the finance minister said, after the premier was re-elected on Wednesday following his ruling bloc's election win last month.

Kuroda's reappointment would mean his signature stimulus program will stay for the time being even as U.S. and European central banks head towards normalising unconventional monetary policy.

The world's third-largest economy is gradually recovering but prices are lagging behind, hovering far below the 2 percent inflation goal.

The central bank left monetary policy steady on Tuesday while a board newcomer called for clearer commitment to ramp up stimulus if necessary, potentially complicating future efforts by the BOJ to dial back its massive monetary stimulus.

© (c) Copyright Thomson Reuters 2017.

©2017 GPlusMedia Inc.

7 Comments
Login to comment

Aso didn't lie. Kuroda is doing much better job than him.

1 ( +1 / -0 )

Well done old boy. You can remain part of the old boys club

2 ( +2 / -0 )

Amakuradi. Cough, cough.

0 ( +0 / -0 )

So Aso has let the cat out of the bag; it's about BOJ getting Dollar/Yen from 80 to 114 so that Japanese exporters can win again. It's about beggar thy neighbor policy via the exchange rate.

1 ( +1 / -0 )

The 2 percent inflation target is a ridiculous policy, but you gotta admit, the economy is now in a lot better shape since Kuroda took over.

-3 ( +0 / -3 )

@blue sky. Japanese are one of the worlds biggest gamblers. 3.3 million addicted. What are the chances of either of these esteemed gentlemen looking after our economy or pension?

0 ( +0 / -0 )

"Coordination between fiscal and monetary policies has worked well."

The only coordination was when, purely coincidentally no doubt, the GPIF lowered its JGB holdings target on the same day as the BoJ announced another round of monetary easing by buying JGBs. Central planning galore.

Kuroda originally was under the impression that his easing measures were to aid fiscal policy reforms, but in the end Abe and Aso haven’t a bold reform bone in their bodies, and decided that a depreciated yen was good enough for them.

Abe also instructed Aso to put a decisive end to deflation, revive the economy and tackle fiscal consolidation

Aso is like 78 years old - who seriously thinks he’s a man about to shed his skin and announce serious reforms?

The changes Abe has instructed can only be achieved by reformers.

the economy is now in a lot better shape since Kuroda took over.

I will grant that it is in ‘better’ shape, but on a scale of 1 to 10 I give it a 3, and much of that is thanks to overseas markets dragging Japan along. It isn’t the leader.

Just devaluing the currency only does so much for your economy, and creates losers too. Consumers and importers.

Once the fiscal mess is addressed and everyone sees a brighter future, then we can say things are looking good.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites