Wed, Jan 30, 2013 - Page 15 News List

ADB head tipped for BOJ governor

BANKING BOSS:Haruhiko Kuroda, the ADB president, is a strong favorite to head the Bank of Japan, which some fear may hurt Tokyo’s sway in the regional bank

Bloomberg

Asian Development Bank (ADB) president Haruhiko Kuroda can become the governor of the Bank of Japan (BOJ) without his nation losing its grip on the Manila-based organization, said Masahiro Kawai, the head of the ADB’s think tank.

“Japan and the US are still the largest shareholders [in the bank] and the US has no intention to assume the presidency of the ADB,” said Kawai, dean of the Tokyo-based Asian Development Bank Institute, in an interview in the city yesterday.

He added that China lacks sufficient support to grab the role and Japan can retain its hold.

Kuroda is the leading candidate to replace BOJ Governor Masaaki Shirakawa when he exits in April, JPMorgan Securities chief economist Masaaki Kanno said in Tokyo.

The possible effect that Kuroda becoming the head of the central bank could have on Japan’s sway at the ADB was raised by Japanese lawmaker Yoshimi Watanabe, the head of the minority Your Party. Watanbe said in a Jan. 16 interview that Kuroda should complete his five-year term through 2016 to prevent China from taking the role at the development bank.

The ADB was founded in 1966 and aids development across the Asia-Pacific region.

Kuroda fits the profile stipulated by Japanese Minister of Finance Taro Aso of having experience in managing a large organization and an international background, Kanno said. Kawai said Kuroda has an “extremely good ability to communicate with an international audience” and would be an “excellent” pick for the role.

Kuroda this month said that the BOJ should conduct unlimited easing until it achieves its 2 percent inflation target, a view in line with that of Japanese Prime Minister Shinzo Abe. Abe has a chance to reshape the BOJ when his government nominates successors to Shirakawa and his two deputies.

The central bank on Jan. 22 committed to the inflation goal and US Federal Reserve-style open-ended asset purchases, while disappointing investors by delaying the program until next year.

The government should present its choices for the three BOJ officials to parliament by the end of next month, said Masashi Waki, chief of upper house parliamentary affairs, on Jan. 21.

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