February 3, 2023 at 12:50 JST
Hiroshi Nakaso attends a meeting with Tokyo Governor Yuriko Koike, Lord Mayor of the City of London Vincent Keaveny and other delegates at Tokyo Metropolitan Government office builidng in Tokyo, Japan June 30, 2022. (REUTERS)
Former Bank of Japan (BOJ) Deputy Governor Hiroshi Nakaso, seen as a leading contender to become the new central bank chief, said he has taken up a post heading a financial conference under the Asia-Pacific Economic Cooperation (APEC) advisory council.
While it was unclear whether Nakaso’s move may affect the nomination to choose the next BOJ head, it comes at a time Prime Minister Fumio Kishida’s administration intensifies its search for a successor to incumbent governor Haruhiko Kuroda.
“I’m a member of ABAC, APEC’s Business Advisory Council, private-sector panel, which will handle the issue of transition finance. I’m going to serve as the chairman of a task force to deal with financial issues,” Nakaso told a fintech symposium late Thursday.
“I’ll do my best to achieve valuable outcomes,” said Nakaso, who is also chairman of the Organization of Global Financial City Tokyo, a group of public and private entities working to raise Tokyo’s profile as a financial hub.
He made no mention on monetary policy or the process to choose the next central bank governor.
A career central banker who served as deputy governor until 2018, Nakaso has repeatedly warned of the drawbacks of prolonged monetary easing such as the distortion its huge presence could create in bond and money markets.
He is considered as more hawkish on monetary policy than incumbent BOJ deputy governor Masayoshi Amamiya, who is also considered by markets as a top contender to become the central bank’s next governor.
Finance Minister Shunichi Suzuki declined to comment, when asked at a briefing on Friday whether Nakaso’s comment on assuming the ABAC job has heightened the chance Amamiya will become next BOJ governor.
“Nothing has been confirmed,” Suzuki said on who the government could choose as the next BOJ governor.
Markets are closely watching the BOJ succession race for clues on how soon the central bank could phase out Kuroda’s radical stimulus program, as inflation perks up and markets creak under the weight of the BOJ’s huge asset purchases.
Yasunari Ueno, chief market economist at Mizuho Securities, said the ABAC post alone will not be reason for Nakaso to turn down a job as important as BOJ governor.
“If he was asked to become BOJ governor, Nakaso probably won’t decline the offer,” said Yasunari Ueno, chief market economist at Mizuho Securities.
“That said, I think Amamiya is still the strongest candidate” as the role he played as an incumbent deputy governor will ensure consistency in the BOJ’s ultra-easy policy, he said.
The government is expected to present to parliament its nominee for the next BOJ governor this month.
ABAC is a private-sector advisory council consisting of business executives that submits proposals to the APEC summit, which is chaired by the United States this year.
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