Haruhiko Kuroda Nominated to Lead Japan’s Central Bank

TOKYO (AP) — The Japanese government on Thursday nominated Haruhiko Kuroda, the president of the Asian Development Bank, to head Japan’s central bank, counting on his support for more aggressive monetary policy to help the world’s third-biggest economy escape recession and deflation.

The current Bank of Japan governor, Masaaki Shirakawa, will step down on March 19, three weeks before his term was due to end. Prime Minister Shinzo Abe favored Mr. Kuroda for the post; a vote by Parliament on the choice is due next month.

The nomination of Mr. Kuroda, 68, was widely expected. The Oxford-educated former vice minister of finance has criticized central bank policies in the past and backs Abe’s strategy for reviving Japan’s economy by fighting deflation through monetary easing and hefty government spending.

Also as expected, the government proposed that Kikuo Iwata, a professor at Gakushuin University in Tokyo, and Hiroshi Nakaso, an executive director at the Bank of Japan, to become the bank’s top two deputy governors.

Mr. Kuroda is viewed as part of the global “currency mafia” in Japan. During his years as Japan’s top financial diplomat, he often decried the Japanese yen’s rise against the dollar, saying it did not reflect the fundamentals of the economy.

Despite frequent central bank interventions in the currency markets, the yen continued its long-term ascent thanks to its status as a safe haven and low interest rates that encouraged an international “carry trade” of borrowing yen and investing the money in the bonds of countries with higher interest rates.

Mr. Abe’s support for a weaker yen, to help support Japanese export manufacturers, has lifted share prices and spurred a decline in the value of the Japanese currency, which has weakened by about 20 percent against the dollar since last fall.

Article source: http://www.nytimes.com/2013/02/28/business/global/haruhiko-kuroda-nominated-to-lead-japans-central-bank.html?partner=rss&emc=rss