Kuroda clears first hurdle

TOKYO: The lower house of Parliament approved Haruhiko Kuroda as the next governor of the Bank of Japan yesterday, heralding a shift to more aggressive monetary easing aimed at ending nearly 20 years of deflation.

The lower house also approved government nominees Kikuo Iwata and Hiroshi Nakaso to serve as the BoJ's two deputy governors. Passage was guaranteed in the lower house, where Prime Minister Shinzo Abe's ruling Liberal Democratic Party (LDP) has a majority.

The LDP lacks a majority in the upper house, but the government's nominations are expected to be passed by that chamber today with support from opposition parties.

Approval in both houses of Parliament is necessary for the nominees to take control of the central bank after its current leadership steps down next Tuesday.

The BoJ has agreed to buy assets or make loans totalling 101 trillion yen (RM3.42 trillion) by the end of this year, part of which includes buying government bonds with a maturity of up to three years.

Expectations are growing that Kuroda will move to extend the duration of government bonds that the central bank buys at the next scheduled meeting on April 3 and April 4.

Abe picked the three nominees to fulfil his pledge to overhaul monetary policy and shake off persistent deflation, a symptom of years of stop-start growth.

Abe's policy prescriptions of monetary and fiscal stimulus have so far helped drive the yen to 31/2 year lows against the dollar, supporting exports. Reuters