Japan lower house approves Takaichi's dovish nominees to fill BOJ board
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TOKYO, March 19 : Japan's lower house of parliament approved on Thursday Prime Minister Sanae Takaichi's choice of two like-minded monetary doves to join the central bank board, a move that could influence its decision on the timing and pace of further interest rate hikes.
Academics Toichiro Asada and Ayano Sato, both seen by markets as strong advocates of economic stimulus, were approved by the lower house of parliament to join the nine-member board.
The nomination still needs approval by the upper house of parliament to take effect.
Asada would replace economist Asahi Noguchi, whose term ends on March 31. Sato would replace Junko Nakagawa, whose term expires at the end of June.
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Both academics belong to a group of reflationists who have advocated expansionary fiscal and monetary proposals now flagged by Takaichi, and have ties with dovish former BOJ executives like ex-deputy governor Masazumi Wakatabe.
The choice may affect the BOJ's discussions on the pace and timing of future rate hikes by altering the composition of the nine-member board, which has increasingly shifted in favour of steady rate increases.
It also highlights Takaichi's hands-on approach to monetary policy, which heightens the chance her administration will add more reflationists to the BOJ board when two more hawks see their terms end next year, analysts say.
If she stays in power long enough, Takaichi would have authority to choose the successors to Governor Kazuo Ueda and his two deputies when their five-year terms end in 2028.
The BOJ ended a decade-long, massive stimulus programme in 2024 and raised rates several times including in December, when it took its short-term policy rate to a 30-year high of 0.75 per cent.
With inflation exceeding the BOJ's 2 per cent target for nearly four years, Ueda has signalled the bank's readiness to keep raising rates if its economic projections materialise.
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