For Prime Minister Fumio Kishida, Japan’s next central bank chief had to symbolize a departure from the unconventional policies of his predecessor Shinzo Abe – but without angering pro-growth lawmakers of Abe’s powerful political faction.
Japanese Prime Minister Fumio Kishida — KYODO/VIA REUTERS
He was branded neither an explicit dove nor hawk. While he was not even on the list of dark horse candidates floated by the media, Ueda was well known in global central bank circles. Most of them spoke on condition of anonymity as they were not authorized to speak publicly, or declined to comment on record due to the sensitivity of the matter.
The bank’s preferred choices were incumbent deputy governor Amamiya, as well as former deputies Hiroshi Nakaso and Hirohide Yamaguchi, given their deep knowledge on monetary policy. A commercial bank executive who met him late last year recalled how Amamiya, when asked, flatly denied the chance of becoming governor. “It struck me how he very strongly ruled out the possibility,” the executive said.
That was too risky for Mr. Kishida, whose own faction is a minority and relies on support from more powerful groups within the LDP. Mr. Kishida, however, said he had “exchanged views” with many people since last year in selecting the new BOJ leadership. While Mr. Kishida did not reveal the name of his preferred choice, the BOJ succession was among topics discussed, said two sources with knowledge of the matter.
The view meshed with that of Kishida’s administration, which wants the BOJ to address the side-effects of yield curve control but not rush into tightening monetary policy. During his seven-year stint as a BOJ board member, Ueda worked closely with Amamiya inventing new tools to combat a banking crisis and debilitating deflation.
That was to re-appoint BOJ executive director Shinichi Uchida for a rare, second four-year term in April last year to ensure he would slide into the deputy governor post.
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