MNI POLICY: Concerns Grow Over Takaichi's BOJ Board Picks

Bank of Japan officials are concerned that Prime Minister Sanae Takaichi may nominate a reflationary successor to board member Asahi Noguchi, whose term ends on March 31, in a manner reminiscent of her mentor, former Prime Minister Shinzo Abe, who selected like-minded policymakers during his tenure, MNI understands.

Abe nominated doves in 2012 to influence monetary policy, including Haruhiko Kuroda as BOJ governor in 2013. Noguchi himself was initially a reflationist when he was appointed by Prime Minister Yoshihide Suga in 2021, but shifted over time to advocate gradual rate hikes.

 Attention will also turn to the successor of largely neutral board member Junko Nakagawa, whose term ends on June 29, 2026.

Takaichi, influenced by Abe, has already appointed Masazumi Wakatabe – a Waseda University professor, former BOJ deputy governor, and supporter of expansionary fiscal and monetary policies – as a private member of the Council on Economic and Fiscal Policy.

Takaichi’s approval rating held steady at 75% in the latest Nikkei/TV Tokyo survey, with 37% of supporters citing “trustworthy” leadership and 34% noting “strong leadership” as the main reasons.

If she remains in office until late 2027 or early 2028, she will play a key role in selecting a successor to Governor Kazuo Ueda, whose term ends on April 8, 2028, and could potentially push for Wakatabe to become BOJ governor, raising questions over whether it is appropriate for a prime minister to appoint a government council member to the top central bank post.