Haruhiko Kuroda, the Japanese government’s nominee for the next central bank governor, on Monday vowed to use all options to reach the 2 percent inflation target and also stressed the need for a faster expansion in stimulus.
At a confirmation hearing to a committee of the Upper House of the Parliament, Kuroda, who currently heads the Asian Development Bank, said that the Bank of Japan’s efforts so far to exit deflation have not been sufficient and that he will take every measure possible to achieve the 2 percent inflation target.
He reiterated that BoJ’s current scale of asset purchases was not enough to beat deflation, which has been acting as a drag on the economy for the past 15 years. Kuroda said further monetary easing is required, but declined to comment on whether he will consider adding more stimulus at his first policy board meeting as governor on April 3-4.
Bowing to pressure from Prime Minister Shinzo Abe, BoJ Governor Masaaki Shirakawa in January doubled the central bank’s inflation target to 2 percent and announced open-ended asset purchases from 2014.
The central bank kept the monetary policy unchanged on March 7, at Shirakawa’s final Policy Board meeting as governor. He will step down on March 19 along with his two deputies.
The Parliament is expected to vote on the government’s nominations this week. If approved by both Houses, Kuroda and his deputies may take charge on March 20. The government’s nominees for the post of deputy governors are Kikuo Iwata, an economics professor, and BOJ Executive Director Hiroshi Nakaso.
In response to a lawmaker’s question, Kuroda said he would consider entering derivative markets to buy assets such as swaps if he is confirmed as governor.
by RTT Staff Writer
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