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Govt in final process in deciding nominee - Nikkei
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Amamiya seen as more dovish than other contenders
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Govt nominee to be presented to parliament this month
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PM Kishida says he will continue to consider best
candidate
(Adds analyst quote, details on Amamiya's policy stance)
By Daniel Leussink and Leika Kihara
TOKYO, Feb 6 (Reuters) - Japan's government has sounded
out Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya to
succeed incumbent Haruhiko Kuroda as central bank governor, the
Nikkei newspaper reported on Monday, citing anonymous government
and ruling party sources.
Prime Minister Fumio Kishida told reporters later on Monday
he would continue to consider the best candidate for the job,
suggesting that no final decision had been made.
The next governor will face the delicate task of normalising
the BOJ's ultra-loose monetary policy, which is drawing
increasing public criticism for distorting market function.
A career central banker who has drafted many of the BOJ's
monetary easing tools, Amamiya has been seen by markets as a top
contender to take over as next governor.
Many analysts see him as a pragmatic policymaker who will
prefer tip-toeing toward any exit, rather than make sudden
changes to a stimulus programme he helped create.
Stefan Angrick, senior economist at Moody's Analytics, said
that if Amamiya were appointed governor it would signal policy
continuity.
"A BOJ under his leadership would not rush towards
tightening," Angrick said. "Yield-curve control would be dialed
back, but a true liftoff in rates would remain contingent on
stronger wage growth and demand."
The government's nomination will likely be presented to
parliament next week and take effect upon both houses granting
approval, which is effectively a done deal since the ruling
coalition has a solid majority.
The Nikkei report did not say whether Amamiya had accepted
the offer. Amamiya declined to comment, when asked by reporters
whether he had been sounded out, according to Jiji news agency.
Deputy Chief Cabinet Secretary Yoshihiko Isozaki told a news
conference there was no truth to the report that the government
had sounded out Amamiya for the top BOJ job.
Kishida's choice of a successor to Kuroda, whose five-year
term will end on April 8, will likely affect how soon the
central bank could phase out its massive stimulus.
Deputy governors Amamiya and Masazumi Wakatabe will also see
their five-year terms end on March 19.
The dollar rose as high as 132.60 yen after the
Nikkei report, topping the 132-level for the first time since
Jan. 12. It gave up some gains after the remarks by Kishida and
Isozaki and was last up 0.5% at 131.84 yen.
FLEXIBLE ON POLICY
The BOJ's leadership transition comes at a time Kuroda's
radical stimulus programme is being put to test by creeping
inflation and rising global interest rates.
Inflation hit 4% in December, double the BOJ's 2% target,
pushing up bond yields and challenging its resolve to defend a
policy that sets a 0.5% cap on the 10-year bond yield.
With markets creeking under the BOJ's heavy-handed
intervention, many investors are betting the bank will start
hiking interest rates under the successor of dovish Kuroda.
Amamiya is considered by markets as more dovish than other
contenders like former deputy governors Hiroshi Nakaso and
Hirohide Yamaguchi.
Dubbed "Mr. BOJ" for masterminding many of the bank's
unconventional monetary tools, he played a key role in drafting
Kuroda's asset-buying programme in 2013.
But people who know him well describe Amamiya as someone who
can adapt policy flexibly, including by reading which way the
political wind is blowing.
While consistently calling for keeping ultra-low rates,
Amamiya said in July the BOJ must "always" think about the means
of exiting ultra-loose monetary policy.
"I think Mr. Amamiya knows well the need to phase out
stimulus at some point, albeit very carefully," one of the
people told Reuters.
(Reporting by Daniel Leussink and Leika Kihara; Additional
reporting by Tetsushi Kajimoto, Kantaro Komiya and Kentaro
Sugiyama; Editing by Diane Craft, Bradley Perrett & Simon
Cameron-Moore)
