"Things don't move smoothly when those who have no experience in managing organizations try to administer an institution"
- Finance Minister Taro Aso
Japanese government is expected to nominate Kikuo Iwata to be the next Bank of Japan deputy governor. Iwata, who has been a vocal critic of BOJ policy, is known as an advocate of aggressive monetary easing. Apart from him Shinzo Abe may nominate Asian Development Bank President Haruhiko Kuroda or Hiroshi Nakaso, a senior BOJ official. As Abe has pledged to do whatever it takes to end decades of deflation, a new governor of the Bank of Japan should share Abe's views and support unlimited stimulus measures. The nomination must be approved by both houses of parliament including the upper house, where the ruling party, led by Abe, does not have a majority and needs the support of opposition parties.
"Kuroda has a degree of credibility, having been there relatively early" with arguing for an inflation target, said Richard Jerram, chief economist at Bank of Singapore Ltd., who has analysed the Japanese economy since the 1980s bubble years. "The end of a toleration of deflation" means the nation is at an inflection point, where growth could return to 1% to 2% a year as real interest rates are brought down, he said.
"Things don't move smoothly when those who have no experience in managing organizations try to administer an institution," Finance Minister Taro Aso told reporters Friday.
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