dChan
Anonymous ID: 53dd2d Jan. 27, 2020, 7:20 p.m. No.7936668   🗄️.is đź”—kun   >>7012 >>7081

Abe Taps Reflationist Adachi to Replace Harada on BOJ Board

 

Prime Minister Shinzo Abe nominated economist Seiji Adachi, a known reflationist, to the Bank of Japan policy board amid growing attention over the leader’s stance on monetary easing.

 

Adachi, head of economic research at Marusan Securities, was tapped to replace Yutaka Harada, another reflationist on the central bank’s board, according to a statement distributed by a parliamentary committee Tuesday. The Diet is likely to approve the nomination before Harada ends his five-year term on March 25 to avoid a vacancy in the board. Adachi wrote a book with other known reflationists on spurring prices to restore growth in the Japanese economy. The authors included former BOJ deputy governor Kikuo Iwata and Koichi Hamada, a member of Abe’s original brain-trust of reflationists, who advised on the nomination of Kuroda and other BOJ board members.

 

Current deputy governor Masazumi Wakatabe and Harada also contributed to the book. The book was published in 2013, shortly before Governor Haruhiko Kuroda launched the BOJ’s massive easing program to lift the economy out of deflation and achieve 2% price growth.

 

He previously worked as an economist at Deutsche Securities Inc. and Credit Suisse AG.

 

Abe’s pick is under close scrutiny by BOJ watchers looking for clues on Abe’s current stance on monetary policy amid signs that achieving the inflation target is no longer at the top of his priorities. Some 76% of economists expected Harada, a consistent dissenter to BOJ board decisions, to be replaced by another like-minded reflationist, according to a Bloomberg survey.

 

The nomination of Adachi is for one of the nine seats on a board that is expected to keep policy on hold for a while. With limited policy tools and relative stability in foreign exchange rates, a majority of economists expect the bank’s next eventual policy step to be tightening.

 

Since last year, Abe has been signaling that achieving 2% inflation is not the be-all and end-all of his Abenomics policy platform to restore stable growth. For the first time since he returned to the premiership in late 2012, Abe last week didn’t even mention deflation in an annual speech at the start of the legislative session.

 

Abe has a record of sending a message to financial markets through BOJ nominations. By handpicking Kuroda in 2013, he fueled speculation that aggressive monetary easing was in the pipeline.

 

After almost seven years of massive easing, there are growing concerns over the side effects of monetary policy. Yet inflation still remains at less than half the 2% target agreed by the government and the BOJ in 2013.

https://www.bloomberg.com//news/articles/2020-01-28/abe-taps-seiji-adachi-to-replace-boj-board-member-harada