Appointed as the first scholar-turned-president after World War II
Former U.S. Treasury Secretary Summers “Japan’s Bernanke”
Ueda recently “continues need for monetary easing”
No sharp reduction in economic stimulus
On the 14th, the Japanese government nominated Kazuo Ueda (72, photo), an emeritus professor of economics at the University of Tokyo, who served as a member of the Bank of Japan review committee, as the new governor of the Bank of Japan (Central Bank). If the personnel plan submitted to the Japanese Diet that day is passed with the consent of the Diet, he will succeed Haruhiko Kuroda (79), the current president, whose term ends on April 8.
As the governor of the Bank of Japan was replaced after 10 years, there is a growing possibility that former Japanese Prime Minister Shinzo Abe’s ‘Abenomics’, which said, “I will print money with a rotary press,” will come to an end. The Japanese financial sector expects a gradual change in large-scale monetary easing policies with the replacement of the governor.
Professor Ueda was nominated as the first scholar-turned-president after the defeat in World War II. It has been customary for the Governor of the Bank of Japan to be held by someone from the inside or from the Ministry of Finance (formerly the Ministry of Finance), so it is evaluated as a ‘surprise greeting’ inside Japan.
Professor Ueda graduated from the University of Tokyo and received his Ph.D. from the Massachusetts Institute of Technology (MIT). While pursuing his PhD at MIT, he was a former MIT professor and protégé of Stanley Fisher, who later served as Vice Chairman of the Federal Reserve. Former Federal Reserve Chairman Ben Bernanke and former European Central Bank (ECB) President Mario Draghi are graduates of MIT. Former U.S. Treasury Secretary Lawrence Summers likened Professor Ueda to “Japan’s Ben Bernanke.”
In Japan, after the resignation of President Kuroda, who symbolizes ‘Abenomics’, there is a high demand for smooth communication with central banks and market participants in major countries, as an economist with an international sense is coming. Governor Kuroda insisted on the ultra-low interest rate policy throughout last year, when major countries including the U.S. raised interest rates simultaneously and concentrated on holding down high inflation, fearing an economic decline due to deflation (falling prices amid economic recession). For this reason, he was pointed out that he had reduced the value of the yen and increased discord with the market due to the widening interest rate gap with major countries.
Professor Ueda recently said, “I think the current Bank of Japan policy is appropriate, and it is necessary to continue financial easing.” He showed a prudent position that he would not drastically change the monetary easing policy.
A former Bank of Japan executive told the Asahi Shimbun, “(Ueda) is a person who can make orthodox judgments based on the economic situation without maintaining a mindset obsessed with Abenomics.” Evaluated. Bloomberg reported on the same day, “Prime Minister Fumio Kishida’s nomination of Professor Ueda as the next governor of the Bank of Japan paved the way for a gradual reduction of sweeping stimulus policies.”
However, as the Japanese economy has been stuck in a recession for a long time, there are high expectations that it will be difficult to come up with a radical exit strategy. According to the Japanese Cabinet Office, Japan’s economic growth rate last year was 1.1%, recording a positive for two consecutive years, but it remained at half the level of 2021 (2.1%). As it is not easy for Japan to find an opportunity for an economic rebound at a time when the prospect of a US economic slowdown remains, some predict that it is difficult to expect a drastic policy change.
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.