2018.02.1923:39:00UTC+00BOJ to Remain on Normalization Path, Ex-Central Banker Kiuchi Says

Takahide Kiuchi said the Bank of Japan will likely remain on the path of “virtual normalization” of monetary policy with the reappointment of Haruhiko Kuroda as the central bank's head.

The ex-BOJ board member that Premier Shinzo Abe's decision to give Kuroda another five-year term as the governor of the central bank meant that the regulator will continue to gradually move away from crisis-mode stimulus and is an indication that the government is no longer pushing for the BOJ to hit its price target as soon as possible.

He said that the appointment of reflationist Masazumi Wakatabe as a deputy BOJ governor is unlikely to affect the course of policy toward additional easing, as some in the markets are speculating. He added that the nomination of Executive Director Masayoshi Amamiya to the other deputy governor post is more significant when speculating about the path of monetary policy.

Kiuchi vocally opposed most of Governor Haruhiko Kuroda's easing program. During his term at the BOJ, Kiuchi has cautioned against the risks of Kuroda's monetary experiment and correctly predicted that the BOJ would be prompted to slow down its bond buying given the increasing price of its stimulus program.

Kuroda's term ended last year but he was appointed for another term on Friday, indicating the government's hope that the BOJ will continue its efforts to reflate the economy.