BoJ chief Kuroda stepping down

Haruhiko Kuroda, the governor of the Bank of Japan (BoJ), is set to step down after a decade in office. Kuroda’s tenure has been characterised by his easy money policies, which saw the central bank’s assets quadruple, surpassing GDP for the first time in a Group of Seven nation. Kuroda was tasked by then-prime minister Shinzo Abe with implementing his “Abenomics” policy in 2013, aimed at reviving Japan’s stagnant economy.

The BoJ chief pledged to do “everything possible” to end the country’s “lost decades” and increase inflation to two percent. However, Kuroda faced criticism for his optimism and his policies failed to boost growth or inflation. In January 2016, the BoJ adopted a negative interest rate of -0.1 percent and later that year announced it would buy as many 10-year government bonds as necessary to ensure yields remained at zero.

However, Kuroda’s efforts were hampered by a lack of major reforms and the economic impact of Covid-19. The BoJ chose not to follow other central banks in aggressive tightening to tackle rising inflation, leading to a gap between the BoJ and the US Federal Reserve, causing the yen to plummet to a 32-year low against the dollar.

Kuroda made a rare policy shift in December by tweaking the bank’s easing programme, leading to the yen’s rapid strengthening against the dollar. Prime Minister Fumio Kishida will nominate Kuroda’s replacement, whose second and final term ends in April.