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Japan's government named academic Kazuo Ueda as its pick to become the next central bank governor, a surprise choice that could heighten the chance of an end to its unpopular yield control policy.
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 nominees will testify at confirmation hearings later this month, though the dates have not been formally decided. Upon parliament's approval, Ueda will chair his first BOJ policy meeting on April 27-28.
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.
In an opinion piece in the Nikkei last July, Ueda warned against prematurely raising rates in response to inflation driven mostly by cost-push factors.
But he also wrote the BOJ must eventually consider how to exit its ultra-loose policy, pointing to the potential flaws of yield curve control (YCC) – a complex framework combining negative short-term rates with a 0.5 percent bond yield cap – such as the difficulty of maintaining the yield cap when inflation perks up.
Some analysts say Japan's fragile recovery will complicate the path toward an exit after data showed the rebound in October-December growth was weaker than expected.
"It might be hard for the BOJ to normalize ultra-easy policy this year as overseas economies are slowing," said Takeshi Minami, chief economist at Norinchukin Research Institute. "The BOJ may have to wait until fiscal 2024 at the earliest."
（CGTN）
