Speculation Regarding the Next Governor of the Japanese Monetary Policy
Discussions on the future of the nation’s monetary policy have erupted following tonight’s release of statistics on Japan’s money supply. Although the data is unlikely to reveal any novel insights, the choice of the incoming governor of the Bank of Japan (BoJ) might be a key factor in determining how the policy will develop in the future.
Position of the departing governor on monetary policy
Despite the recent spike in inflation, current BoJ Governor Haruhiko Kuroda, whose tenure is slated to expire in April, continues to be a fervent supporter of maintaining the ultra-loose policy. Although some data, such as the increase in earnings, suggests otherwise, he sees the surge as perhaps temporary. Though the new governor has not yet been announced, Masayoshi Amamiya, one of Kuroda’s subordinates, has been the subject of much rumor. Amamiya would be viewed as a candidate of continuity if appointed. However, a different decision can point to a change in the direction of the policy.
Regarding Inflation and Interest Rates, Fed Chair Powell
Jerome Powell, the chairman of the Federal Reserve, said yesterday that it was still too early to say whether or not enough steps had been done to reduce inflation to the Fed’s objective of 2%. Despite last week’s positive job data, he maintained his worry that a tight labor market would result in higher salaries. Speakers today are anticipated to endorse these assertions and hint at the prospect of more US interest rate increases.
Deliberations Summary from the Bank of Canada
In the coming days, the Bank of Canada will release its first “report of thoughts” from a policy meeting, which might provide further details on the central bank’s recent decision to raise interest rates and its subsequent suggestion to stop.