The nomination of Nomura Asset Management Chief Executive Officer Junko Nakagawa for the Bank of Japan’s board is seen maintaining the existing balance of opinions among the bank’s nine policy-setting members.
Prime Minister Yoshihide Suga’s government nominated Nakagawa, who pioneered a route for women to reach the upper echelons of Japan’s biggest securities firm, to replace the only woman on the board now, former banker Takako Masai, according to a parliamentary document seen Tuesday.
Little is known of Nakagawa’s specific policy leanings, but as she hasn’t been a vocal advocate of adding extra stimulus, she is expected to take a centrist’s position rather than a dissenter’s.
Her nomination comes as the BOJ heads into a policy review next week. With inflation now running in negative territory, the bank is expected to unveil policy tweaks designed to help it keep its stimulus in place for years to come, making its communication with financial market increasingly vital.
"It’s important to install someone who knows markets and communicates well,” said Hideo Kumano, chief economist at Dai-Ichi Research Institute and a former BOJ official. "They also wanted to have someone who doesn’t have any strong view on monetary policy with some staunch easing advocates already at the board.”
Before taking the top job at Nomura Holding Inc.’s asset management unit, Nakagawa served in the early 2010s as the holding company’s first female chief financial officer.
A spokesman at Nomura declined to comment on her nomination.
Now 55, she was the only woman among a group of executives handpicked by former Prime Minister Shinzo Abe’s administration to meet with Donald Trump when he visited Tokyo as U.S. president.
Nakagawa is the second nominee to the BOJ board this year, a crucial one for the bank and for the Japanese economy as it struggles to shake off the pandemic.
Her nomination is likely to ease market concerns over the BOJ board tilting too much toward an easing bias after Suga surprised economists and investors by picking a known reflationist to the board earlier this year. With four out of the nine seats to be filled by reflationists, an increase would have secured them a majority, potentially complicating Gov. Haruhiko Kuroda’s room for maneuver.
Asahi Noguchi, an academic economist known for his reflationist views, joins next month, replacing Makoto Sakurai.
Nakagawa is likely to fit in with the majority group around Kuroda, said economist Takahide Kiuchi at Nomura Research Institute Ltd. and another former BOJ board member. "Even with Noguchi, reflationists won’t be a majority, and so another neutral-stanced member will give Kuroda more of a free rein.”
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