Japan’s government has decided to nominate Haruhiko Kuroda to serve as governor of the central bank for another term when his current one expires in April, according to media reports, a sign the country’s ultra-loose monetary policy will remain in place.
The reappointment would heighten the chances the BOJ will stick to its policy of capping borrowing costs around zero, offering some relief to investors jittery about signs that some major central banks may dial back their crisis-mode policies earlier than expected.
The nomination needs approval by both houses of parliament, a near certainty as premier Shinzo Abe’s ruling coalition holds comfortable majorities in the lower and upper houses of the Diet.
“All in all it is a good sign,” said Stefan Gerlach, chief economist at Swiss bank EFG and former Deputy Governor of the Central Bank of Ireland.
“It means there is policy continuity and obviously it is good to have someone who is respected by the government enough to be reappointed.”
Japan’s Kyodo news agency reported on Friday Abe would likely reappoint Kuroda for a rare second term, a choice widely expected by markets.