Yen falls on Bank of Japan governor report

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Yen falls on Bank of Japan governor report

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The yen fell to its lowest in 33 months against the dollar on reports that Haruhiko Kuroda is to be the nominee to take over as governor of the Bank of Japan.

Kuroda, the current President of the Asian Development Bank, fits the profile for Prime Minister Shinzo Abe, who wants the central bank to take radical steps to revive Japan’s economy, which has been in recession four times in the last 12 years.

Sources said the government is likely to nominate Kuroda and two deputies this week for parliamentary approval.

It is also reportedly lining up Kikuo Iwata, an academic who advocates unorthodox monetary easing steps, and BOJ Executive Director Hiroshi Nakaso, who now oversees the central bank’s international operations, as deputy governors. Iwata told reporters he had been offered the job and he would accept it.

Like the US Federal Reserve, the Bank of Japan has cut interest rates close to zero. Since then it has adopted unorthodox measures to inject cash into the economy.

The nominations must be approved by both houses of parliament, which means Abe will need opposition support because his ruling-bloc lacks a majority in the upper house. The incumbents leave March 19.

If approved, the nominations increase the chances that the BOJ will ease monetary policy on April 3-4, the first rate review under the new leadership, say officials with knowledge of the central bank’s thinking.