Connect to share and comment

BoJ chief says to step down before term expires

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

But he said he had told the prime minister he will resign on March 19, when the terms for two deputy governors expire, so that his successor and the rest of the bank's new leadership could be sworn in at the same time.

"There was no government pressure at all. It was my decision," Shirakawa was quoted as saying by the Kyodo news agency after informing Abe of his plans earlier in the day.

"I have judged it would be very beneficial to launch the new leadership together from the perspective of the central bank doing its job to contribute to the Japanese economy in the current situation," he told reporters at the BoJ's headquarters in Tokyo.

Abe, 58, had 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.

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

Last month the 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.

si-pb-jms/arp

http://www.globalpost.com/dispatch/news/afp/130205/boj-chief-says-step-down-term-expires-0