Former European Central Bank President Jean-Claude Trichet welcomed Asian Development Bank President Haruhiko Kuroda as the nominee for the next leader of the Bank of Japan, in an interview on Monday.
Noting his previous ties with Kuroda, Trichet said he is sure of “very important participation” of the BOJ in the international community of central bankers if Kuroda succeeds Masaaki Shirakawa as BOJ governor.
Shirakawa, who is set to step down on March 19, “has always played a very important role,” Trichet said, adding that Shirakawa has influenced the global community of central bankers.
Meanwhile, Trichet said interventions in currency markets by authorities should take place only “in absolutely exceptional circumstances” and “on the basis of a multilateral accord.” Unless these conditions are met, interventions will lead to “currency wars” and could have bad results, he said.
“We know that these (kinds) of policies are not positive for all participants,” he said. “If all currencies are going down, it doesn’t change anything.”
The Group of Seven has also issued a statement calling for market-based exchange rates.
“It’s been reaffirmed by the G-7 that the fundamentals and the market had to determine the value of the various currencies,” Trichet said. “It was an appropriate reminder.”
On the global economy, Trichet said, “No advanced economy is out of the woods.” He urged advanced nations to do their homework to bolster their economies.
Trichet said the eurozone economy is seeing “progress” in efforts to tackle the sovereign debt crisis through fiscal adjustments and monetary policies.
“Everything has been done” by the ECB, Trichet said, noting that it will be possible for the ECB to introduce an exit strategy to normalize anticrisis monetary policies when the time comes.
Aso’s Kuroda hopes
Finance Minister Taro Aso expressed hope Tuesday that Haruhiko Kuroda, nominated as the next Bank of Japan governor, will fight deflation in line with a joint policy statement signed by the government and the central bank.
“We believe that if Mr. Kuroda becomes governor, he will steer monetary policy in the direction” set in the joint statement released in January, in which the BOJ pledged to achieve a 2 percent inflation target, Aso said.
Aso also said Kuroda, the Asian Development Bank president, is an “appropriate” person to replace incumbent BOJ chief Masaaki Shirakawa, who is steps down March 19.