Bank of Japan Governor Masaaki Shirakawa is to step down three weeks before his five-year term was due to end.
That makes possible an earlier than anticipated shift to more aggressive monetary easing.
Japan’s Prime Minister Shinzo Abe has been pressuring the central bank to do more to lift the economy and had made it clear he wanted someone in the job who will be bolder than Shirakawa.
The governor’s term was due to end on April 8, but his two deputies’ are scheduled to leave on March 19. Shirakawa told reporters that he had informed the prime minister about his decision to leave early so that his successor and the new deputies can start their roles at the same time.
“We are going to work out without delay the schedule of submission (of candidates) to parliament for swift approval,” Akira Amari, economics minister in Abe’s cabinet, told reporters.
Abe led his Liberal Democratic Party to a landslide victory in a December lower house election promising to revive the stagnant economy by coaxing the central bank into aggressive monetary stimulus and boosting government spending.
Last month, the BOJ signed a joint statement with the government adopting a new two percent inflation target as a sign of its commitment to fighting deflation. It also announced a shift to “open-ended” asset buying.
But many investors were disappointed that even in taking unconventional steps the BOJ displayed a caution that has characterised Shirakawa’s term, delaying the “open ended” buying until next year and limiting its scope.
Not quitting in anger
In the final months of his term, Shirakawa had to endure mounting political pressure for action as Japan’s economy was slipping into its fourth recession since 2000.
But analysts took his decision to leave early as a genuine effort to smooth out the succession, rather than a final political statement.
“Governor Shirakawa is not a person who would leave his post in anger,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.
He said the outgoing governor was trying to simply bring the terms of the central bank chief and his deputies back into line. They fell out of synch when Shirakawa’s appointment was delayed five years ago after parliament had rejected the first candidate.