Gov't Nominates Academic Kazuo Ueda as Next BOJ Governor

The Japanese government on Tuesday presented Kazuo Ueda to parliament as its nominee for the next Bank of Japan governor, putting the academic and former member of the BOJ's decision-making body forward to replace Haruhiko Kuroda in its first leadership change in a decade.

The new leadership is seen as attuned to the daunting challenges facing the central bank, from addressing the side effects of years of monetary easing under Kuroda that has distorted bond markets and expanded the BOJ's balance sheet to paving the way for future policy normalization, Kyodo News said.

After his surprise nomination was reported last Friday, Ueda, 71, has said the BOJ's current policy is appropriate and monetary easing should continue for a while. Still, financial markets continue to weigh his policy stance and are on alert against any hints of policy change once he takes the helm in April.

Ueda's nomination, along with those for two deputy governors, Ryozo Himino, a former commissioner of the Financial Services Agency, and Shinichi Uchida, an executive director at the central bank, is expected to be approved by mid-March, on the back of the majority control of the ruling parties.

Both houses of parliament must approve the nominees before the government of Prime Minister Fumio Kishida can formally appoint them for five-year terms.

Ueda, who taught in the Faculty of Economics as a professor at the University of Tokyo, would be the first governor in postwar Japan to have spent most of his adult life in academia.

The BOJ, the most dovish central bank among the Group of Seven nations, faces market pressure to tweak its policy. Ueda's comments in parliament will be scrutinized for any signs of a transition from the current accommodative monetary policy that has formed a key pillar of "Abenomics," the economy-boosting program pushed by late Prime Minister Shinzo Abe.