Fukui Toshihiko was officially sworn in as new governor of the Bank of Japan on Thursday, with former Vice Finance Minister Toshiro Muto and Kazumasa Iwata, a senior Cabinet official, appointed as vice governors. Under the revised BOJ Law of 1998, all members of the BOJ Policy Board are to serve a five-year tenure. It is Fukui, Muto and Iwata, plus the six other members currently on the board, who will be responsible for steering the nation's monetary policy in the coming years.
Expectations are high for deflation-fighting measures as economic conditions remain severe. However, it would be unrealistic to think that the inauguration of a new BOJ team will lead to dramatic changes. Consumer prices are on a downward trend worldwide, and China, which continues to enjoy rapid economic growth, is no exception.
Although calls are mounting for the central bank to do something to stop the decline in share prices as well, a slumping stock market is not a problem unique to Japan. On the contrary, key stock price indexes have fallen by about 25 percent in both Japan and the United States over the past year, whereas the margin of decline in Germany has been 50 percent, showing the drop occurred much faster in Europe.