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Abe readying to nominate Kuroda as next head of Japan’s central bank

Kyodo

Prime Minister Shinzo Abe is preparing to nominate Asian Development Bank chief Haruhiko Kuroda as the next governor of the Bank of Japan, government sources revealed Sunday.

Abe’s government is expected to submit its candidate to succeed outgoing BOJ Gov. Masaaki Shirakawa to the Diet this week. The nomination of the central bank’s new head, as well as two deputy governors, must be approved by both the Lower and Upper houses.

Kuroda, 68, has extensive international connections after serving as vice finance minister for international affairs, as well as foreign exchange policy, from 1999 to 2003. He is also known to support aggressive monetary easing to tame Japan’s stubborn deflation, in line with Abe’s policies since taking office in late December.

By installing Kuroda as head of the BOJ, Abe apparently aims to accelerate his drive to put an end to the deflation that has plagued the economy for years. Kuroda would also be expected to explain the government’s radical monetary policies — dubbed “Abenomics” — to the international community, as some countries have been highly vocal in their condemnation of what they see as a deliberate attempt to weaken the yen and give Japan’s exporters a competitive advantage.

If his candidacy is approved, Kuroda will become the first former Finance Ministry bureaucrat to assume the top post at the BOJ since Yasuo Matsushita, who served as governor more than three years through 1998.

Shirakawa, whose term runs until April 8, announced earlier that he would step down March 19, together with his two deputy governors.

The names floated as potential nominees to fill the two deputy posts include BOJ Osaka branch chief Masayoshi Amamiya, 57, BOJ Executive Director Hiroshi Nakaso, 59, and Gakushuin University professor Kikuo Iwata, 70.

Kuroda has so far refrained from commenting on what he termed his “hypothetical nomination” for BOJ governor. He has also said he is “fully satisfied” with his current position as president of the ADB, which he assumed in 2005 and runs through November 2016.