The Japanese government announced on Tuesday that it would appoint Hajime Takata and Naoki Tamura as new board members of the Bank of Japan.
Tamura is a seasoned banker and Takata is an economist who has repeatedly warned about the current loose interest rate policy.
End of easy interest rate policy at Bank of Japan
Observers see the election of the two as new board members of the Bank of Japan as a departure from the lax interest rate policy that BJO has adopted in recent years.
Takata, 63, will replace Goshi Katoka, a well-known reflectionist economist who has advocated for more monetary easing to spur economic growth.
Takata is currently the President of the Global Research Center at Okasan Securities. He began his career at the bank, the predecessor of Mizuho Bank, and also worked for Mizuho Research Institute, now Mizuho Research and Technologies, as an economist.
Takata has raised questions about the negative impact of years of loose monetary policy and has written a book on how to end accommodative policy.
BoJ under criticism
Under Kuroda, who became head of the BOJ in 2013, the Bank of Japan introduced monetary easing, a key feature of then-prime minister Shinzo Abe’s “Abenomics”. The president was supported by the former Japanese prime minister, who was assassinated in early July.
The BOJ is buying heavily Japanese government bonds as part of its “yield curve steering” program to keep long-term interest rates low, thereby supporting businesses and households. However, the central bank has been criticized for distorting the bond market and has raised concerns over its ever-growing balance sheet.
The BoJ has not deviated from its accommodative stance, although inflation has pushed the core consumer price index above the 2 per cent target. Unlike other central banks, which are now raising interest rates. This has led to a sharp fall in the value of the yen.
The other candidate, Tamura, 61, is a senior advisor at Sumitomo Mitsui Banking, one of Japan’s largest banks, replacing the current Hitoshi Suzuki.
The decision-making committee of the BOJ consists of nine members – the governor, two deputy governors and six other members.