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
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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.