As Bank of Japan (BOJ), the country’s central bank, is getting ready for the end of term of its governor Masaaki Shirakawa, it announced yesterday that it has adopted a 2% inflation target and that it will commit to an open-ended purchase of assets for 2014. These, after Prime Minister Shinzo Abe has consistently pressured Shirakawa to make monetary policies that would remove Japan from its long-running period of deflation.
With the position of governor of BOJ opening in two months, Isao Iijima, one of Abe’s political strategists, is of the opinion that Toshiro Muto is suitable for the job. Muto is a former finance ministry official and also a former deputy governor at the BOJ. Iijima says that experience at the budget bureau of the finance ministry, as well as Muto’s solid connections in the world of politics and finance, are invaluable for the successor of Shirakawa.
There is also a buzz that Kazumasa Iwata is a likely candidate to be a replacement for Shirakawa. Iwata is a former government economist and also served as a former BOJ deputy governor. He was outspoken with regard to adopting a bolder monetary stimulus to stop deflation. But, whether it be Muto or Iwata or any surprise candidates, one thing is certain: Abe will want someone who shares his goals of having a more inflated economy through aggressive monetary policies and huge government spending seated as governor of BOJ.
[via Asia One]
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