Japan Appoints Kazuo Ueda as Next BOJ Governor; Analysts Expect No Policy Changes in Kuroda’s Last Meeting

Japan has approved the selection of Kazuo Ueda as the next governor of the Bank of Japan, Kyodo reported on Thursday.

Kyodo reported that the House of Councilors has approved Ueda, clearing the way for his formal appointment by the government.

The parliament also approved Shinichi Uchida and Ryozo Himino as the next Bank of Japan deputy governors, according to Kyodo.

The yen recovered after falling in Friday morning trading. On the basis of deteriorating risk sentiment and in anticipation of BoJ governor Haruhiko Kuroda’s final policy announcement, the yen surged the most in a month on Thursday.

The upcoming meeting of the central bank is not expected to result in any changes to monetary policy, according to a Reuters poll.

Since this will be governor Haruhiko Kuroda’s last meeting before his term ends in April, the central bank is widely anticipated to keep its benchmark interest rate at -0.1%.

Goldman Sachs identified three significant reasons for Kuroda’s decision: the meeting’s proximity to the end of the fiscal year, ongoing wage talks, and “Kuroda’s long-held view that premature rate hikes have delayed Japan’s exit from deflation.”

Analysts at Goldman noted, “Some sliver of heed should still be taken,” and “caution should be warranted in case Governor Kuroda takes responsibility for cleaning up his legacy Yield Curve Control policy.”