With less than half a year remaining in the term of office of Governor Kuroda of the Bank of Japan, the selection of his successor is in full swing.
Personnel affairs over the top of the Bank of Japan, which governs monetary policy as the "keeper of prices."
I will explain how to choose in the first place and what kind of person is suitable.
(Economic Department reporter Keiichiro Furuichi)
What is the job of the Governor of the Bank of Japan?
Although he is the top personnel of the Governor of the Bank of Japan, I think that there are many people who are unfamiliar with the work of the Bank of Japan and do not understand it well.
The Bank of Japan is an authorized corporation based on the Bank of Japan Act and has the following three functions.
" bank of notes"
"bank of banks" "bank of
governments"
As Japan's sole central bank, it issues banknotes and administers monetary policy.
The most important role is to work on price stability.
Price trends are closely related to our lives and to the growth of the economy as a whole.
The Bank of Japan is stabilizing prices by adjusting the amount of money circulating in the world.
For this reason, it is also called the “price keeper”.
At the top is the Governor of the Bank of Japan.
The Governor of the Bank of Japan is appointed by the Cabinet with the consent of the Diet.
The term of office is five years.
He can be reappointed.
Based on the independence and neutrality of the Bank of Japan, he will not be dismissed at the request of the government or the Diet during his term of office, and will, in principle, fulfill his duties.
Before the revision of the Bank of Japan Law in 1997, the government had the "right to dismiss", but now it is gone.
The Bank of Japan Act stipulates that the governor is the prime minister (coordinating and managing the business) on behalf of the Bank of Japan.
The Governor of the Bank of Japan manages the Policy Board, the highest decision-making body, and serves as chairman at meetings that decide monetary policy.
No chair proposal has ever been rejected at this meeting.
In addition, at the G20 and G7 meetings and other international financial forums, I have the role of explaining Japan's position together with the Ministers of Finance and others, and promoting cooperation with other countries.
For this reason, the world's market players are paying great attention to his words and actions.
A single word from the governor of the Bank of Japan can move the market.
The current Governor Kuroda is the 31st president of the Bank of Japan since its establishment in 1882.
He has set a price stability target of 2% and has promoted large-scale monetary easing to break out of long-standing deflation.
As of October, Governor Kuroda has been in office for nine years and six months.
This is the longest in history, surpassing the 18th governor of the Bank of Japan, Naoto Ichimanda, who served for more than eight years during the post-war reconstruction period of the 1950s.
How is the governor of the Bank of Japan selected?
What backgrounds have been selected for the governors of the Bank of Japan?
In the past, it was customary to alternate appointments with people from the Bank of Japan and the Ministry of Finance, but the three governors before Kuroda, who was from the Ministry of Finance, were all from the Bank of Japan. I was.
Yu Hayami, who was appointed in 1998, is an internationalist.
Toshihiko Fukui, who was appointed in 2003, has been regarded as the ace of the Bank of Japan from early on, and has held major posts related to general affairs personnel and monetary policy.
Masaaki Shirakawa has been in charge of monetary policy in the planning department for a long time, and has also served as a professor at Kyoto University.
Before Mr. Shirakawa was elected president, the government's initial personnel proposal presented to the Diet was rejected due to the influence of the so-called twisted Diet.
And the current governor, Kuroda, was a finance officer in charge of foreign exchange policy at the Ministry of Finance.
So far, the appointment of the Governor of the Bank of Japan has always been accompanied by the question of how to maintain the independence of the Bank of Japan and how to maintain a distance from politics.
When will the presidential appointment be decided?
Kuroda's term of office is until April 8 next year, but when will the successor be decided?
Looking back on March 20, 2013, when President Kuroda assumed office, then Prime Minister Abe informed the Liberal Democratic Party Secretary-General of the president and vice-president appointments on February 25.
It means that the personnel plan was decided more than three weeks before his appointment.
However, in mid-January of this year, Prime Minister Abe heard the opinions of experts on the policies and character image required of the next governor of the Bank of Japan, and about three months before the appointment of the new governor, he was considering the governor's personnel affairs. It seems that it was in the
When Shirakawa took office as Governor in 2008, there was confusion, such as the government's proposal being rejected as I mentioned earlier, so I won't explain it here. The personnel proposal was presented on February 24th.
The timing of more than three weeks before the date of inauguration on March 20 is almost the same as the case of Governor Kuroda.
Prime Minister Kishida mentions appointment of Governor of the Bank of Japan
At the House of Representatives Budget Committee meeting on the 17th, Prime Minister Kishida was asked, "What do you think about the appointment of the Governor of the Bank of Japan?"
Prime Minister Kishida responded as follows.
“I think there will be various developments in the economic and financial conditions going forward, but we must select the most suitable person as of April next year. We have to keep this in mind and focus on it.”
This remark means that it is important to continue to implement consistent, predictable and predictable policy responses in order to ensure the effectiveness of monetary policy. This is what I answered by quoting the remarks of Kuroda, the governor of the Bank of Japan.
Based on this view, many market players do not expect Prime Minister Kishida to ask the Bank of Japan to change its current monetary policy framework.
What are the views of market players?
This time, we asked 20 economists who analyze the Japanese economy and the Bank of Japan's monetary policy, as well as former executives of the Bank of Japan, what kind of person they think would be suitable for the next governor.
There were various types of people, such as "a person who can maintain continuity of policy," "a person who has high expertise and is familiar with practical work," and "a person who is familiar with international finance," but all of them answered that a person who graduated from the Bank of Japan would be suitable.
And what everyone pointed out in unison was that "the next president will walk a tough road."
Incoming president facing a difficult situation
The yen exchange rate fell to the 150 yen level to the dollar, renewing the weak yen level for the first time in about 32 years.
Moreover, even with the continuation of large-scale monetary easing for a long period of time, the Bank of Japan's 2 percent inflation target, which is accompanied by wage increases, has still not been achieved.
Prices continue to rise, and there are growing concerns that the global economy will slow down.
What kind of person will be the next President who will face such a difficult situation?
And what kind of policies will you implement?
I would like to keep an eye on future developments regarding the appointment of the Governor, as it can affect market trends and our daily lives.
attention schedule
Next week, the Bank of Japan's monetary policy meeting will be held for two days from the 27th.
The BOJ is compiling its "Outlook Report," in which it announces the outlook for the consumer price index for the current fiscal year, one year, and two years from now. You will be noticed.
In addition, major companies in Japan and the United States will announce their financial results one after another.
The focus is on the impact of monetary tightening by central banks in Europe and the United States on financial results and earnings forecasts.