After the 'bazooka', Bank of Japan dismantles the work of its radical chief

Japan Times -- Sep 13
After years of shock-and-awe stimulus, the Bank of Japan is quietly rolling back radical policies introduced by its bold chief Haruhiko Kuroda and pioneering controversial new measures that blur the lines between central banking and politics.

The unwinding of Japan’s complex policy is driven by Deputy Gov. Masayoshi Amamiya, insiders say, a career central banker considered the top contender to replace Gov. Kuroda whose term ends in 2023.

Amamiya and his top lieutenant Shinichi Uchida have worked behind the scenes to make Kuroda’s complicated policy framework — a product of years of unsuccessful attempts to revive stagnant consumer prices — more manageable, and eventually return Japan to more normal interest rate settings, even as the economy struggles with the pandemic.

The BOJ’s dwindling monetary options mean the two ambitious technocrats are instead pushing the bank into schemes bordering on industrial policy, such as those designed to encourage bank sector consolidation and green finance.

The most decisive and latest swing in policy direction, though not formally communicated, came in the BOJ’s March meeting when it announced it would no longer commit to a fixed program of risky asset purchases, an inconspicuous sign it was slowing its monetary support.