Who will be the successor to the Bank of Japan governor? February may reveal the answer

　　According to foreign media reports, when Japanese Prime Minister Fumio Kishida talked about the central bank governor Haruhiko Kuroda whose term of office will end on April 8, he

　　Kishida Fumio emphasized on the personnel issue of the central bank governor: "First of all, we will replace the candidates and submit them to Congress after the candidates are actually finalized." , I think so."

As the world's major central bank, the Bank of Japan's monetary policy decisions affect global markets.

At the end of last year, the Bank of Japan "surprised" the world by adjusting the yield curve control (YCC) policy framework.

At present, the market is closely watching the Bank of Japan's movements in 2023.

Who will be the next governor of the Bank of Japan?

A close aide to Haruhiko Kuroda, current deputy governor Masayoshi Amamiya, and former BOJ deputy governor Hiroshi Nakaso are among the candidates considered

　　by most BOJ watchers polled by foreign media .

"Mr. Bank of Japan" odds?

　　Among them, the current vice president Amamiya Cheng is the most popular candidate, and two-thirds of the respondents believe that he will succeed.

　　Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute, said Amamiya is well versed in current policy and would be an ideal candidate to revise the Kuroda-era loose policy without interruption.

　　Nomura Securities analyst Takenobu Nakashima wrote last year's latest report "Who is the Next Governor?"

" said that Yu Gong is the most powerful candidate for president.

　　In a speech on July 28 last year, regarding the strategy for exiting monetary easing, Amamiya said that while it is too early to discuss specifics, the Bank of Japan is constantly considering whether the central bank's 2% inflation target will be "increased by How best to implement and communicate monetary policy measures in the context of achieving this in a sustainable and stable manner.

However, since the actual package of measures will depend on prevailing economic and price conditions, Amamiya said it was impossible to provide details until the actual situation was observed.

　　Since then, in a speech on Sept. 26 last year, Amamiya said the Japanese economy faces many uncertainties.

In a speech on Oct. 19 last year, policy committee member Seiji Adachi said: "History shows that there are considerable risks in turning to monetary tightening when the possibility of a 'storm making landfall' cannot be ignored."

Who are the other favorites?

The second most popular candidate is Hiroshi Nakaso

, the former deputy governor of the Bank of Japan. 17% of economists think Hiroshi Nakaso is the most likely candidate.

　　Nakaso, known for his firefighting efforts during the global financial crisis, vividly described his struggles during Japan's near-financial collapse in the late 1990s in a 740-page book published earlier this year. A bitter struggle as then deputy governor of the Bank of Japan.

He has also chaired the study groups of the Bank for International Settlements and the G20, and is in close contact with a number of global central bankers.

Makoto Sakurai, a former member of the BOJ's monetary policy committee, expects the Lieutenant General to place greater emphasis on the long-term health of the financial system given his background.

　　In a media interview on May 16 last year, Nakaso Hiroshi said that if the potential growth rate can be increased, even by a small amount, wages will rise, thereby increasing household spending power, and prices and interest rates will also rise. It will make it possible to normalize monetary policy.

　　He has since said on Sept. 28 last year that while he thought the Abenomics policy package was appropriate, in hindsight monetary policy had carried too much of the burden.

The statement could be read as saying he would not support a move to easier monetary policy if he becomes BOJ governor.

Elsewhere, of the BOJ's two vice-governor posts, Yuri Okina, now chairman of a think tank, rose to first place in support from third in the September survey.

She was followed in the latest survey by Masatsugu Asakawa, president of the Asian Development Bank, who was third in the previous survey, and then by Shinichi Uchida, executive director of the Bank of Japan. .

　　If Ong Baihe becomes the deputy governor of the Bank of Japan, she will become the first female deputy governor of the Bank of Japan.

Tokiko Shimizu, the BOJ's first female executive director, was also listed as a vice-president candidate in a previous Bloomberg survey (seventh most mentioned).

　　Regarding the proportion of female members of the monetary policy committees of major central banks, the Nomura report stated that the proportion of the Federal Reserve is 50% (6 of 12 members are women), and the proportion of the European Central Bank is about 10% (2 of 21 members are women). women), the BoE is 30% (3 out of 9 members) and the Bank of Japan is about 10% (1 out of 9 members).

The BOJ has the lowest ratio, the same as the ECB, and the lowest number of female committee members on the list.

From the perspective of global trends, Nomura believes that Weng Baihe is likely to become the deputy governor of the Bank of Japan.

　　In a media interview published on September 6 last year, Weng Baihe said that it would be difficult for the Bank of Japan to reverse its main policy.

Based on the current pace of wage growth and Japan's potential growth rate, the BOJ's 2% inflation target looks high and warrants a re-examination of the BOJ's monetary policy, including its price stability target.

She also said that consideration should be given to issuing a joint statement by the government and the Bank of Japan to encourage the government's efforts to increase growth potential, as the fundamental task is to increase value-added productivity.

Will Japan exit quantitative easing?

"No matter who takes over as BoJ governor, monetary policy normalization in 2023 will be tough, given Japan's widening output gap and the possibility of a deep global recession," said Bloomberg senior economist Yuki Masujima. .

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　　Regarding the Bank of Japan's monetary policy, a Bloomberg survey showed that when asked about the Bank of Japan's next possible move, 29 of the 30 economists said they would withdraw from monetary easing.

Among them, 13 people predicted that it will start this year, and 15 people said that they will not start to withdraw until 2024.

　　Regarding how to exit the monetary easing policy, 18 economists surveyed believe that the most likely means is to modify the wording of its forward-looking guidance.

Ten economists saw the most likely step as ditching the policy of keeping short-term interest rates negative, while another 10 opted to widen the 10-year yield control band.

Harumi Taguchi, chief economist at S&P Global Market Intelligence, said further expansion of the yield cap could be considered given the distortion in the 10-year JGB yield curve.