Abe taps finance researcher for Bank of Japan’s divided board


Prime Minister Shinzo Abe’s government nominated an international finance researcher to the Bank of Japan’s divided board to fill the seat of a retiring member who recently voted against expanding monetary stimulus.

Makoto Sakurai, 70, of the Sakurai Associates International Finance Research Center, is to fill the seat of Sayuri Shirai, 53, whose term ends on March 31. Shirai, who is the only woman on the board, opposed the adoption of the negative-rate policy in January. She had voted with Gov. Haruhiko Kuroda to expand asset purchases in 2013 and again in 2014.

The change in the central bank’s board comes as its negative-rate strategy generates controversy at home and abroad and as inflation remains far from the BOJ’s 2 percent target. The board’s composition is increasingly important for policy with the last expansions of stimulus passing by votes of 5 to 4.

Etsuro Honda, an economic adviser to Abe, said last month that he expected the new member to be someone “who completely understands Abenomics and the importance of the BOJ’s aggressive stimulus to ending deflation.”

Sakurai co-authored a paper with one of Abe’s economics advisers, Koichi Hamada, and one other person in 1977, according to a list of Hamada’s publications on a Yale University website. The article was called “Low Interest Rates and Income Distribution” and was published in Contemporary Economics.

Sakurai, whose views on monetary policy are little known, graduated with a Bachelor’s degree in economics from Chuo University in 1970 and started working at Export-Import Bank of Japan in 1976, according to a government biography.

Given his past speeches and profile, he seems to be close to what Abe and Kuroda are seeking for their reflationary policy, said Daiju Aoki, Japan economist at UBS Group. He was a researcher at Yale University’s Economic Growth Center in the early 1980s, and then was at the Ministry of Finance’s policy research institute. From 1992, he was head of the international finance research center at what is now the MS&AD Research Institute. In 2007, he founded Sakurai and Associates.

Sakurai could join the board for the April 27 to 28 policy meeting. His appointment to a five-year term must be approved by both houses of the Diet, which are controlled by Abe’s government.

The Bank of Japan lags behind other central banks in the representation of women on the board. Since the structure was changed in 1998, one of the nine seats has been filled by a woman, and Shirai was the third female member.

There are four women on the U.S. Federal Open Market Committee, including Chair Janet Yellen, and the Malaysian central bank has been led by a female governor since 2000.

Abe will have an opportunity to further shape the board in June with former bank executive Koji Ishida’s term coming to an end. Kuroda was handpicked by Abe, along with the two deputy governors and two other board members.

Although Kuroda continues to show confidence that the nation will reach the inflation target, consumer prices are hovering near zero, with the governor mainly blaming that on the sharp decline in energy prices.

The BOJ surprised markets in January by adopting a negative rate strategy, aiming to drive yields down and stimulate lending and the economy. The move was intended to counter risks generated by volatile financial markets, falling oil prices and uncertainty over emerging nations like China, the bank said.

The policy has generated criticism and confusion, with lawmakers in Japan summoning Kuroda for questioning a record number of times in February and Eurogroup chief Jeroen Dijsselbloem expressing concern about negative rates at the Group of 20 meeting in Shanghai.