The Japanese government has formally named Kazuo Ueda to become the next central bank governor, turning to a respected monetary policy expert to determine the future of the country’s decades-old ultra-loose policies.
Ueda, described as “Japan’s Ben Bernanke” by former US Treasury secretary Larry Summers, was a Bank of Japan board member from 1998 to 2005, and helped introduce forward guidance when it adopted its zero-interest rate policy in the late 1990s.
As chair of the US Federal Reserve between 2006 and 2014, Bernanke oversaw the central bank’s response to the 2008 financial crisis and introduced quantitative easing as a counter-measure.
Following reports of his nomination last week, Ueda told reporters that the central bank should continue current easing measures.
But Ueda, professor emeritus of the University of Tokyo with a PhD in economics from MIT, has previously expressed concerns about the side effects of the BoJ’s yield curve control policy and experts expect him to gradually shift the economy towards interest rate normalisation.
On Tuesday, the government also nominated Ryozo Himino, former commissioner of the Financial Services Agency, and Shinichi Uchida, a BoJ executive who has played a central role in shaping Japan’s monetary policy, as deputy governors.
The nominations by Prime Minister Fumio Kishida will require Diet approval, which he is expected to get since the ruling coalition has majority control of both houses of parliament.
If Ueda is approved, it would be the first time in postwar Japan that an academic was appointed central bank chief, a role that had historically rotated between officials from the BoJ and the finance ministry.