The Kuroda era ends in Japan, Ueda is the new governor of the BoJ- Corriere.it

Governor’s era ends as Japanese parliament gives green light to appoint Kazuo Ueda as head of Bank of Japan (BoJ) next month Haruhiko Kuroda, who after 10 years is preparing to leave the leadership of the Japanese central bank. After the lower house of the Diet on Thursday, on Friday it was the upper house that voted to appoint Ueda, 71, as governor of the BoJ for a five-year term. Prime Minister Fumio Kishida’s government chose Ueda last month. Ueda, an economics professor, who will now have to manage the difficult legacy of an ultra-accommodative monetary policy to stimulate inflation growth.

L‘ecJapanese economy stuck in decades of deflation, with a continuous downward spiral of prices. The so-called Abenomics put in place by former Prime Minister Shinzo Abe and centered on interest rates that are negative or around zero, had precisely the aim of defeating deflation. But recently things have changed. The inflation rate hit 4% in December, a 41-year high, double the target set by the central bank.

For Japan remains an exception. If the Western economies I am returned to aggressively raise interest rates to stop the surprise return of inflation, including at the last monetary policy meeting chaired by the governorKuroda, the BOJ has kept interest rates ultra-low and gave up to change its controversial policy to control bond yields, leaving options open in view of the transition at the top in April.

Kuroda, 78 years old, with the massive stimulus brought about by his monetary policy over the past 10 years took the Japanese economy out of the defthe action, against which the country has fought for over two decades, but it has also put a strain on bank profits, distorting the market with low and prolonged interest rates. Even as major central banks, from the Federal Reserve in the US to the European Central Bank in the eurozone, aggressively shifted tack, tightening credit conditions to curb price increases, the BoJ continued to pursue a ultra-accommodative monetary policy, explaining that high inflation is not likely to last in Japan, as wage increases and growth are not enough to sustain it.

So in the two-day meeting concluded on FridayJapan’s central bank maintained its short-term interest rate target at -0.1% and the yield of zero 10-year government bonds. The BoJ also left unchanged the fluctuation band of the 10-year yield which allows the yield to rise up to 0.5%. And also for the future, the expectation that short and long-term interest rates will remain at current levels or lower, said the BoJ.

Ueda will chair his first policy meeting on April 27-28, when the BoJ board will present new quarterly growth and price forecasts through 2025.