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BoJ chief says to step down before term expires

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(Globalpost/GlobalPost)

Bank of Japan chief Masaaki Shirakawa said Tuesday he would step down about three weeks before his term ends, after the central bank and Japan's new government butted heads on policy matters.

Shirakawa said he hoped his successor would be sworn in at the same time as the bank's new deputy governors, without making a direct reference to friction with Tokyo.

"The two deputy governors' terms will expire on March 19," he told reporters.

"I told the prime minister that I will resign on March 19 so that a (new) governor can start with two deputy governors."

Shirakawa had been expected to leave when his term expires on April 8, after new Prime Minister Shinzo Abe openly said he wanted a more like-minded candidate.

The 58-year-old premier had also threatened to change a law mandating the bank's independence unless it fell into line with his government's demands for aggressive monetary easing measures.

It was not immediately clear if the hawkish premier had accepted Shirakawa's early departure.

Among the candidates seen as possible successors are Haruhiko Kuroda, president of the Asian Development Bank, and Toshiro Muto, a former deputy governor at the BoJ.

Last month the under-pressure bank said it would adopt a two percent inflation goal demanded by the new government in a bid to beat the deflation that has haunted the world's third-largest economy for years.

It also unveiled an unlimited asset-purchase scheme -- similar to the US Federal Reserve's quantitative easing -- to start next year.

But days later, Shirakawa cast doubt on the inflation target and said pressure on central banks has "risen globally more than ever".

The head of Germany's Bundesbank Jens Weidmann warned last month over what he described as government meddling in monetary policy.

"We are witnessing disturbing abuses... where the new government is interfering massively in the affairs of the central bank, calling forcefully for a more aggressive monetary policy," he said, citing Japan as an example.

Tokyo's policies have fuelled criticism from abroad that the government is orchestrating a devaluation of the yen, and risking a global currency war. Japanese officials have repeatedly denied those claims.

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http://www.globalpost.com/dispatch/news/afp/130205/boj-chief-says-step-down-term-expires