So now we know. After much speculation, leaking and hearsay, the next governor of the Bank of Japan has been named. Toshihiko Fukui it is, to the surprise and dismay of many it seems, judging by immediate media reactions here and elsewhere.
The dismayed are of the view that under the governorship of Mr. Fukui, unorthodox monetary policy does not stand a chance. That is likely to be true. And that is surely not such a bad thing.
If anything, Japanese monetary policy has been suffering under the pressure to be unorthodox for far too long. That is to say, since the inception of the "zero-interest-rate" policy. Unorthodoxy is all very well as a one-off measure to shock the patient out of paralysis. But keep the shock therapy on for too long and it loses its potency. Not only that, it starts to defeat its purpose by producing side effects that distort the economy's basic functions.
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