World News

Japan’s lower house approves reflationist Adachi to join BOJ board

TOKYO (Reuters) – Japan’s lower house on Thursday approved Seiji Adachi, an economist known as a proponent of massive monetary stimulus, to join the central bank’s nine-member policy board, paving the way for parliament approval of the government nominee.

Adachi, a 54-year-old economist at Marusan Securities, would replace Yutaka Harada, a reflationist-minded board member whose five-year term expires on March 25.

Adachi’s addition is unlikely to tip the balance of the board, which is split between those who see room for additional easing and others who are worried about the cost of prolonged low-rate policy such as a hit to bank profits.

The nomination, which needs approval from both chambers, is likely to sail through the upper house on Friday, given the ruling coalition’s solid majority in both houses of parliament.

Adachi’s policy-meeting debut will be on April 27-28, when the Bank of Japan will issue a quarterly report of its long-term economic and price projections.

Adachi is close to Koichi Hamada, an economic adviser to Prime Minister Shinzo Abe, who backed BOJ Governor Haruhiko Kuroda’s aggressive stimulus adopted in 2013 to beat deflation.

Under a policy dubbed yield curve control, the BOJ now guides short-term rates at -0.1% and the 10-year government bond yield around 0%. It also buys government bonds and risky assets such as exchange-traded funds to reflate the economy.

Many market players expect the BOJ to stand pat on monetary policy for the foreseeable future to support a fragile economy.

(Reporting by Tetsushi Kajimoto; Editing by Sam Holmes)