- At Odds With the Government, Japan’s Central Bank Chief Offers an Early Exit!
by HIROKO TABUCHI, http://www.nytimes.com/
TOKYO — The governor of the Japanese central bank, Masaaki Shirakawa, said on Tuesday that he had offered to step down on March 19, three weeks before the end of his term, under intense government pressure on the bank to take bolder steps to resuscitate the deflationary economy.
Prime Minister Shinzo Abe is expected to replace Mr. Shirakawa, who has long preached caution on monetary policy, with a successor who is more open to printing money, stoking inflation and bringing an end to the falling prices that have weighed on Japan.
During his five-year term, Mr. Shirakawa resisted calls from successive governments to be more aggressive, warning that loose money would only lead to unchecked government spending and runaway inflation. Mr. Shirakawa also argued that the government, not the Bank of Japan, needed to do more to encourage economic growth through structural reforms and other growth policies.
Since late last year, Mr. Abe has taken the bank to task, singling out its tepid monetary policies as the root of Japan’s economic woes. He successfully campaigned on a bolder monetary agenda ahead of nationwide elections in December, arguing that the central bank needed to set an inflation target of 2 to 3 percent. The strategy resulted in a decisive victory for his Liberal Democratic Party.