Bank of Japan Governor, Haruhiko Kuroda, was reappointed for the next five-year term and it also implies the central bank will move away from further crisis-mode stimulus, according to the previous BOJ board member and current executive economist at Nomura Research Institute., Takahide Kiuchi. Prime Minister, Shinzo Abe decided to reappoint Kuroda who failed to push through the inflation program of two percent target since he started in 2013. This says that the government will not enforce the central bank in reaching the target at a faster pace. Withdrawing the policy target along with the rate of money printing in 2016, the central bank is reducing its massive stimulus program through reduction of bond purchases. The de-facto normalization of monetary policy is already going through and will be continued under the leadership of Kuroda as stated by the board member of BOJ, Kiuchi. The reappointment indicates the government will push through the monetary policy and foresees that the country will sustain its plans to raise the inflation of the economy. Kiuchi also mentioned the possible negative outcomes from the monetary experiment of Kuroda, which could result in slower bond buying amid the higher costs of the stimulus program. He stated that there is a strong desire to sustain the policy of the central bank. The BOJ will also resume the slow bond buying and disregard the negative rates could not be accomplished right away which would imply the less effective in reaching the target values, as described by Kiuchi. Normalization of the policy does not necessarily mean that the easing program will be completely put aside. They prefer to have a slow but moderate control of the monetary support. Three years following the failed attempt of money printing to boost inflation, the BOJ improved its policy framework in 2016 and focus on reaching the interest rates from the pace of money printing. From that time on, bond buying is executed at a slower rate at an average half the momentum as it loosely commits to buy each year.
RYCHLÉ ODKAZY
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