By Tetsushi Kajimoto and Leika Kihara
TOKYO (Reuters) – Kazuo Ueda, the government’s nominee for the next head of the Bank of Japan (BOJ), will speak at a confirmation hearing. House of Representatives February 10, a ruling party official said on Thursday.
Year-old academics could steer the central bank out of its long run of ultra-loose monetary policy. The House of Commons Steering Committee told reporters on Thursday.
The government’s deputy governor nominee – former bank regulator head Ryozo Himino and Bank of Japan executive Shinichi Uchida – will also testify after Ueda in the afternoon, he said.
The House of Lords Steering Committee failed to set a date for its House confirmation hearing, the committee chair told reporters Thursday after a meeting.
The government named Ueda as the next Bank of Japan governor on Tuesday, a surprise choice that could raise the odds of an end to its unpopular yield control policy.
Junichi Hansawa, head of Japan’s banking lobby, said he expected the Bank of Japan to exit its ultra-loose policy at some point, adding to market volatility.
“To reduce such risks, we hope that the Bank of Japan will make appropriate decisions under its new leadership,” Hanzawa, chairman of the Bankers Association of Japan, said at a news conference on Thursday. Decision to ensure healthy market functioning through adequate dialogue (e.g. forward guidance). Approval from both houses of Congress, which is practically a sure thing as the governing coalition has supermajorities in both houses.
Steering committees in both houses asked the government to investigate whether officials may have leaked the names of BOJ nominees to the media before they were presented to parliament.
A government inquiry found no media leaks, Although the controversy is partly why the upper house committee failed to decide on a date for the hearing.
As a former BOJ board member, Ueda will succeed Haruhiko Kuroda, whose second five-year term will be Ends April 8.
With inflation exceeding the BOJ’s 2% target, Ueda will face the daunting task of phasing out its yield control policy, which has distorted market function and weighed down bank
In an op-ed published last July, Ueda warned against premature rate hikes, but said the BOJ must finally consider how to exit its ultra-loose policy.
Under yield curve control (YCC), BoJ guides short-term interest rates to -0.1% and 10 1-year bond yield capped at 0.5% as part of sustainable efforts to meet its 2% inflation target.
Stressing the difficulty of maintaining YCC, 10 due to market bets Note that the central bank will eventually ditch the cap and allow long-term rates to rise further, with 1-year bond yields remaining stuck at the BoJ’s 0.5% cap on Thursday.
