By Leika Kihara
TOKYO, Feb 17 (Reuters) - The Bank of Japan's incoming
governor Kazuo Ueda will lead a powerful trio that includes a
technocrat who designed yield curve control, and a former
banking-sector regulator who can look after the fallout from a
future end to low interest rates.
As an academic specialising in monetary policy, Ueda will
likely focus on timing a smooth exit from yield curve control
(YCC) and re-designing what has become a framework difficult to
sustain as inflation perks up, analysts say.
The government nominees for his two deputies - career
central banker Shinichi Uchida and former banking watchdog chief
Ryozo Himino - would bring expertise as bureaucrats to work out
the details in putting Ueda's policy ideas into shape.
Having spent most of his career drafting monetary policy
plans, Uchida has worked closely with deputy governor Masayoshi
Amamiya in master-minding many of the BOJ's policy ideas
including YCC, say sources familiar with the matter.
Uchida was re-appointed for a rare, second term last year as
the BOJ's executive director, a move seen by analysts as laying
the groundwork for a smooth transition in case the top central
bank post goes to someone outside the institution.
People who know him describe the 60-year-old Uchida as a
sharp-minded technocrat who is skilled at designing innovative
monetary tools, and worked well with incumbent governor Haruhiko
Kuroda as well as his less-dovish predecessor Masaaki Shirakawa.
"He's probably among the best placed to dismantle YCC as he
played a key role crafting it," said one of the sources, a view
echoed by two more sources.
"As deputy governor, Uchida will probably be the core in
monetary policy decisions," said a former BOJ board member who
recently spoke with Uchida.
As the sole career central banker in the BOJ's leadership,
Uchida will also oversee an institution with staff of over 4,600
handling a range of operations beyond monetary policy.
As former head of the Financial Services Agency (FSA),
Himino brings his expertise on financial regulation and overseas
contacts cultivated during his stint as an executive at the
Financial Stability Board (FSB) - a global body coordinating
financial rule-making among Group of 20 major economies.
The appointment of Himino suggests the BOJ will put more
emphasis in looking at the impact of its ultra-low policy on the
banking sector, a contrast to Kuroda's approach of focusing on
the economic benefits of prolonged easing, analysts say.
During his stint at the FSA, the 62-year-old Himino worked
with the BOJ in designing programmes to prod regional lenders to
beef up profitability and combat headwinds from prolonged low
rates and a rapidly ageing regional population.
"It's a very powerful trio of technocrats who can get the
job done as a team," said a second source.
"With this team, coordination between the BOJ and FSA will
strengthen and help enhance Japan's presence in global
discussions on financial regulation."
The two deputy governors will assume their posts on March
20, taking over from incumbents Amamiya and Masazumi Wakatabe.
Ueda will join as BOJ governor on April 9.
(Reporting by Leika Kihara; Editing by Sam Holmes)
Messaging: leika.kihara.reuters.com@reuters.net))
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