"Expectations are high, and markets won't be satisfied with just an extension of current policies"
- Masamichi Adachi, senior economist at JPMorgan
Japanese Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda to lead nation's central bank, as Abe seeks a more aggressive regime in order to overcome decades of deflation. The change in policy may tilt BoJ to introduce more bold measures to reach the 2% inflation target as soon as possible. On Thursday, Abe also nominated two deputy governors—Kikuo Iwata and Hiroshi Nakaso. However, he still needs an approval by both houses of parliament in votes early March. As the soon-leaving current BoJ Governor Masaaki Shirkawa introduced an asset-purchase fund worth 76 trillion yen ($808 billion) and failed to end the process of falling price level and boost growth in the world's third largest economy, the Bank of Japan is expected to pack a bigger punch under Haruhiko Kuroda.
"Expectations are high, and markets won't be satisfied with just an extension of current policies," said Masamichi Adachi, senior economist at JPMorgan in Tokyo. "The new leadership has to show it is different from the previous regime."
"The onus is on this generation to rebuild and strengthen Japan's economy to convince younger generations that their future is bright," Mr. Abe said in a televised address to Parliament.
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