Economy BOJ debate: farewell to Abenomics

thomas · 17 Feb 2023

After weeks of debate, PM Kishida announced on Tuesday that Ueda Kazuo was to succeed Kuroda Haruhiko as the new governor of the Bank of Japan (BOJ). Ueda, whose appointment came as a surprise even to LDP heavyweights like Aso Taro, will become the first academic to head the central bank after World War II. In the days leading up to Ueda's appointment, members of the ruling LDP faction once led by former PM Abe made it clear they would vehemently fight any possible change to the course of Abenomics. That economic package is synonymous with the ultra-loose monetary policy implemented under Kuroda for the past decade.

Ueda's appointment will most likely result in a silent farewell to Abe's iconic but failed policy of "Abenomics".

Kishida's administration also wanted someone who would signal a departure from Kuroda's monetary experiment that was a key part of his predecessor's "Abenomics" stimulus policies, and became deeply unpopular with the public for failing to broadly distribute wealth. But choosing a more hawkish policymaker like Nakaso or Yamaguchi would have drawn discontent from reflationist-minded lawmakers from the late Abe's powerful faction within the ruling Liberal Democratic Party (LDP). That was too risky for Kishida, whose own faction is a minority and relies on support from more powerful groups within the LDP. [...] Kishida's choice was welcomed by many BOJ policymakers, as Ueda was no stranger to the institution and a quiet cheer-leader of its pre-Kuroda conventional policies.

With Japan's new central bank boss, Kishida bids farewell to Abenomics

In contrast to Abe, Prime Minister Fumio Kishida does not see monetary policy as a quick fix for the problems of the real economy. "Unlike Abe, Kishida isn't trying to revive growth through monetary policy," Takahide Kiuchi, an executive economist at Nomura Research Institute and a former policy board member at the BOJ, told Nikkei Asia. In Ueda, many see a nonideological voice that can help guide Kishida to an exit from the central bank's currently dominant role in Japan's economy.

Paywall alert:

Kazuo Ueda: Next BOJ chief inherits world's toughest central bank job

'Nonideological' pragmatist tasked with unwinding controversial legacy of predecessor Kuroda

asia.nikkei.com

Economy BOJ debate: farewell to Abenomics

thomas

Unswerving cyclist

Kazuo Ueda: Next BOJ chief inherits world's toughest central bank job

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