On April 18, the Japanese government proposed Goshi Kataoka and Hitoshi Suzuki as candidates for replacing two outgoing Monetary Policy Committee members of the Bank of Japan, Takahide Kiuchi and Takehiro Sato, whose term expires on July 23.
Kiuchi and Sato are the last remaining MPC members who were appointed by the previous Democratic Party of Japan government. When they were appointed they were considered doves but they turned out to be vocal critics of the BOJ’s current expansionary policy.
While these appointments surely strengthen the first arrow of Abenomics, the real question is what the Abe administration is going to do about Abenomics as a whole? I would suggest the prime minister listens closely to what Kataoka said.
But I’ll start with Suzuki — whom I do not know in person. Suzuki is a long-time serving banker at the Mitsubishi Tokyo UFJ Bank. After graduating from the Faculty of Economics at Keio University, he started at the Mitsubishi Bank, which became the current entity after several mergers.
His stance on monetary policy is unknown and his appointment seems to fit BOJ’s traditional way of appointing at least one MPC member from major banks. As an executive in charge of market operations, Suzuki spearheaded the bank’s shift in asset management from purchasing Japanese Government Bonds to diversifying operations as early as April 2012 (his interview, in Japanese). In fact, the bank had returned the “privilege” of primary dearlership of the JGBs to the government.
His background as a banker might suggest that he does not favor the negative interest rate, which is hugely unpopular among bankers, but he will not go against the current policy to which his bank has already adjusted.
Meanwhile, Kataoka is an economist at Mitsubishi UFJ Research and Consulting. After graduating from the Faculty of Commerce at Keio University, he started working at Sanwa Research Institute, which merged with others to be the current entity. While working, he earned his Masters degree at the Graduate School of Commerce at Keio University. The Faculty and Graduate School of Commerce at Keio University has several distinguished econometricians — Kataoka learned econometrics and quantitative analysis there.
He is 44 years old, which means by the Japanese standard he is very young. When his appointment is confirmed, he will become the BOJ’s youngest Monetary Policy Board member ever — at least since the new Bank of Japan Law became legislated in 1998.