The government on Friday formally appointed academic Kazuo Ueda as the next Bank of Japan governor for a five-year term, succeeding Haruhiko Kuroda, in the central bank's first leadership change in a decade.
Ueda, 71, is the first BOJ chief hailing from academia in postwar Japan and is seen as a pragmatist with deep knowledge of monetary policy. He served as a member of the central bank's decision-making body between 1998 and 2005.
His tenure, starting Sunday, comes at a difficult time for the BOJ as it balances supporting the economy with monetary easing to attain its elusive 2 percent inflation target and growing calls to further reduce the side effects.
Financial markets expect an overhaul of the yield curve control program, blamed for distorting bond markets by keeping both short-term and long-term interest rates depressed. While Ueda has said monetary easing should continue, he has not ruled out the possibility of reviewing the yield-control program.
With Kuroda's departure, achieving the 2 percent inflation target is now entrusted to Ueda. After Prime Minister Fumio Kishida surprised market participants with his selection of Ueda, both houses of parliament endorsed the nomination in March.
The collapse of U.S. regional banks and Swiss lender UBS's government-brokered rescue of Credit Suisse have rattled financial markets. Banking concerns have raised uncertainty over the pace of monetary policy tightening by the U.S. Federal Reserve and other major central banks.
Ueda, who has taught at the prestigious University of Tokyo and Kyoritsu Women's University, will work with two new deputy governors -- Ryozo Himino and Shinichi Uchida. Himino, a former commissioner of Japan's financial watchdog, and Uchida, an executive director of the BOJ, assumed their posts on March 20.
Chief Cabinet Secretary Hirokazu Matsuno expressed hope that the three will work as one team to exhibit their collective strength.
"We hope that the Bank of Japan will guide monetary policy appropriately based on economic, price and financial conditions, in coordination with the government," the top government spokesman said at a press conference.
The first policy-setting meeting under the new leadership is scheduled for April 27 and 28.
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