Detective-novel fan governor Kuroda to solve BOJ mystery
An avid reader of detective novels, Haruhiko Kuroda may now get a chance to try to unravel the mystery of engineering Japanese economic growth if the Asian Development Bank chief is confirmed as the next Bank of Japan governor.
An avid reader of detective novels, Haruhiko Kuroda may now get a chance to try to unravel the mystery of engineering Japanese economic growth if the Asian Development Bank (ADB) chief is confirmed as the next Bank of Japan (BoJ) governor.
Prime Minister Shinzo Abe is expected to nominate the 68-year-old former finance ministry official for the BoJ's top post, sources told Reuters on Monday. Abe is trying to transform the central bank into a bold deflation fighter to revive Japan's stagnant economy.
A fluent English-speaker with a masters degree from Oxford University, Kuroda served as Japan's top currency diplomat after the Asian financial crisis in the late 1990s and as ADB president since 2005, putting him in regular contact with global policymakers.
Kuroda is likely need to harness his international network and experience as BoJ governor to counter criticism from other countries that Japan's aggressive monetary easing is intended to weaken the yen and give its exporters an unfair advantage.
"Kuroda can hold the stage with anybody - Bernanke, the Bundesbank or the People's Bank of China," said Jesper Koll, head of equities research at JP Morgan in Tokyo, who has known Kuroda for two decades.
Kuroda may also be more keen to communicate BoJ policy than incumbent Masaaki Shirakawa, who was regularly criticised as being too coy about playing up the effect of the central bank's stimulus measures.
When guiding Japan's yen-selling currency intervention as its top currency diplomat -- a post he held from 1999 to 2003 -- Kuroda was keen to send out the message, through the media, that Tokyo was indeed stepping into the market and serious about stemming yen rises.
People who have worked with him describe him as soft-spoken and approachable, but a demanding boss who would ask a lot from subordinates. "He is very energetic and loves work," said an ADB official who works under him.
The flip side of Kuroda's global resume may be a lack of extensive contacts among domestic business leaders and bankers, a gap that could, however, be made up for by his deputies.
Abe will need to get a signoff on Kuroda from opposition parties since his Liberal Democratic Party and its junior coalition partner control parliament's lower house but lack a majority in the upper chamber, which must approve the nominee.
But Kuroda might fit the bill as a candidate radical enough to fit Abe's criteria but moderate enough for the biggest opposition Democratic Party of Japan (DPJ), where some heavyweights have taken issue with Abe's aggressive stance.
Some Japanese politicians and policymakers worry that if Kuroda leaves his post at the ADB before it expires, Japan would risk losing the coveted job to another country such as China.
Traditionally, a Japanese finance official is chosen to head the Manila-based ADB, much as a European by tradition runs the International Monetary Fund and an American, the World Bank.
That might be the price to pay for a central bank governor who fully supports Abe's push for aggressive easing and can articulate Japan's policies to an international audience.
Kuroda has said the BoJ's 2 percent inflation target, set in January, can be met in two years, contrary to the central bank's argument that it has not set a strict timeframe for achieving that level.
Kuroda would succeed Shirakawa, 63, a career central banker who was made governor in 2008 as a compromise choice and is due to leave with his two deputies on March 19.
Under Shirakawa's leadership, the central bank has cut interest rates almost to zero and kept injecting cash into the economy, but has been criticised for being too cautious.