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Academic Ueda named Japan central bank’s head

Japan’s government named academic Kazuo Ueda as its pick to become next central bank governor, a surprise choice that could heighten the chance of an end to its unpopular yield control policy.

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Ueda, a 71-year-old former Bank of Japan (BOJ) policy board member, will succeed incumbent Haruhiko Kuroda, whose second, five-year term, ends on April 8, according to documents presented to parliament on Tuesday.

The leadership transition marks a historical end to Kuroda’s decade-long monetary experiment that sought to shock the public out of a deflationary mindset, and could eventually align Japan with other major economies toward higher interest rates.

With inflation exceeding the BOJ’s 2 pct target, Ueda faces the delicate task of normalizing its prolonged ultra-easy policy that has drawn increasing public criticism for distorting market function and crushing bank margins.

WATCH: Japanese Prime Minister Fumio Kishida’s government nominates Kazuo Ueda to helm the Bank of Japan in a move likely to pave the way for a gradual paring back of the central bank’s full-bore [email protected] reports on what's next https://t.co/l7vK8NTUpE pic.twitter.com/mhPcxY4yx4

— Bloomberg (@business) February 14, 2023

Analysts expect Ueda, who had warned of the dangers of premature interest rate hikes in the past, to hold off on tightening monetary policy.

His appointment came as a surprise to many investors who expected the job to go to a career central banker like deputy governor Masayoshi Amamiya.

Ueda at the helm will make it easier for the BOJ to depart from the current stimulus than a choice like Amamiya, who played a key role in crafting Kuroda’s policies, analysts say.

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