A key economic adviser to Prime Minister Shinzo Abe who has been a strong advocate of monetary stimulus will become Japan’s ambassador to Switzerland, according to a notice issued by the Prime Minister’s Office on Friday.
Etsuro Honda, 61, a former Finance Ministry bureaucrat who has known Abe for decades, will combine his new post in Switzerland with his existing advisory duties, the top government spokesman said.
“Mr. Honda will continue to provide advice to the prime minister as he has up until now, combining his roles,” Chief Cabinet Secretary Yoshihide Suga told reporters, when asked whether Honda’s absence would allow the Finance Ministry to exercise more influence over the premier.
The outspoken Honda, also a professor at Shizuoka University, this week called for a sales tax increase set for April 2017 to be postponed after the last hike in 2014 tipped the economy into a recession. He also said the Bank of Japan should take further action to shore up the economy, but would probably not act at its meeting next week. Last month, Honda called for a stimulus package of about ¥5 trillion to bolster the nation’s stagnant consumption.
Honda was one of a group of advisers who persuaded Abe of the benefits of ultraeasy monetary policy while he was in opposition. He toured the country in 2012 making speeches about the benefits of reflation. This, Honda said, impressed Abe enough to request him to explain his ideas — and to make him a special adviser, tasked with collecting information to assess potential BOJ governor candidates.
After Abe began a second stint in office in December 2012, Honda took up his economic advisory post with a work space next to Abe in the prime minister’s official residence. Under the influence of Honda, as well as retired Yale University professor Koichi Hamada, Kikuo Iwata and Yoichi Takahashi, Abe picked reflationist Haruhiko Kuroda as Bank of Japan Governor in 2013, bringing about a sea change in Japan’s monetary policy.
While unprecedented monetary easing led to a weaker yen, benefiting Japan’s exporters, and helped fuel a 58 percent rise in the Topix share index since Abe returned to power, media polls show most people in Japan haven’t felt positive effects from the changes.
Honda has known Abe since they met at a wedding reception more than 30 years ago. The two are also golf buddies, and Honda has a second home near Abe’s in Yamanashi Prefecture, adjacent to Tokyo.
Jiji Press reported in late December that the government was considering making Honda ambassador to a European country.