By Leika Kihara
TOKYO, Jan 31 (Reuters) - Hirohide Yamaguchi, among the
top candidates to become the next Bank of Japan (BOJ) governor,
warned about the danger of signing a joint policy document with
the government when he was deputy governor in 2012, minutes of
that meeting showed on Tuesday.
The remark suggests that Yamaguchi, who is considered as
more hawkish on monetary policy than other candidates, could be
wary of aligning monetary policy decisions too closely with the
government's priorities if he was to head the central bank.
Under then governor Masaaki Shirakawa, the BOJ pledged to
pursue "powerful" monetary easing to beat deflation under a
joint document it signed with the government in October 2012.
Back then, the BOJ was facing strong political pressure to
adopt an inflation target, and take stronger steps to rescue the
economy from deflation and a spike in the yen that was hurting
exports.
"It's very important to consider whether issuing such a
document could cause problems over the BOJ's independence,"
Yamaguchi was quoted as saying at the central bank's October
2012 policy meeting, according to the minutes.
"I support the decision. But it won't be very good if this
becomes a precedent, in which we won't be able to conduct policy
unless we sign a document with the government each time," he
said at the meeting when the BOJ decided to sign the document.
Under relentless political pressure, the BOJ adopted a 2%
target in January 2013. It also signed a new joint statement
that month with then premier Shinzo Abe's administration that
committed the BOJ to hit 2% inflation as soon as possible.
Since retiring from the BOJ in 2013, Yamaguchi has been a
vocal critic of incumbent Governor Haruhiko Kuroda's radical
monetary stimulus, and has warned of the rising cost of
prolonged easing.
With inflation exceeding its 2% target, the BOJ is now under
pressure to phase out its massive stimulus. A panel of academics
and business executives on Monday called for a revision to the
joint statement to allow the BOJ to change policy more flexibly.
Yamaguchi is seen as among candidates to succeed Kuroda when
his second, five-year term ends in April.
(Reporting by Leika Kihara; Additional reporting by Takahiko
Wada; Editing by Jacqueline Wong)
Messaging: leika.kihara.reuters.com@reuters.net))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.