Victory for Abenomics as Japan's maverick PM gets his pick of governor

Haruhiko Kuroda is expected to be the new governor of the Bank of Japan.

The financial press is reporting that Japan's prime minister Shinzo Abe is expected to nominate former finance-ministry official Haruhiko Kuroda as governor of the Bank of Japan. If Kuroda's nomination goes ahead, it will be a victory for Abe's desire to pursue aggressive unconventional monetary policy in order to boost Japan's economic fortunes.

Abe has been engaged in a low-level squabble with his finance minster, former Prime Minister Taro Aso, over the extent of Japan's efforts to boost growth and weaken the yen. Aso, who favours more conventional economic policy, most recently squashed the prime minister's suggestion that Japan might buy foreign bonds as a general policy.

That rift is arguably one of the most important in economic policy today. Just as Britain has been the site of the most rigorous experiment on the effects of voluntary austerity on growth (spoiler: results were negative), Japan is pushing some of the most aggressively expansionary monetary policy ever — and has ideas to go even further. Abe's government has already eroded central bank independence, forcing the Bank of Japan to actively push for growth and inflation; it has "nationalised" capital stock, allowing the state to pay for nominally private sector investment; and it has set explicit targets for the Nikkei, the country's premier stock index, of over 17 per cent growth in one month.

The tussle between Aso and Abe over the foreign bonds purchase was widely seen as a proxy fight for the right to award the governorship, and with the apparent selection of Kuroda, Abe has taken the lead. The governor-to-be has long been a critic of the BoJ's lack of stimulus and will likely encourage it to follow the government's suit in further aggressive, unorthodox measures to hit the new 2 per cent inflation target.

But Reuters' Leika Kihara and Yuko Yoshikawa inject a note of caution to their reporting:

Abe must go through political maneuvering to close the deal, as the nomination must be approved by both houses of parliament including the upper house, where his ruling coalition lacks a majority.

The government hopes to garner support from either the main opposition Democratic Party of Japan (DPJ) or a group of smaller parties to pass the nomination.

There's likely to be an even bigger fight on Abe's hands with one of his two desired deputy governors, Kazumasa Iwata. Iwata is an academic who has called for Japan to print money to fight deflation; his appointment would suggest large scale monetary expansion is on the cards. He was widely reported to be Abe's first choice as governor, before Kuroda was picked as the compromise candidate.

With an ageing population, and flunked recovery from a financial crisis, Britain's experience over the next decade may be scarily similar to Japan's over the last. If Abenomics lifts the country out of its hole, we should all be hoping Mark Carney and the rest of the Bank of England are paying close attention, and preparing to follow suit in case the worst happens.

Haruhiko Kuroda. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Steve Garry
Show Hide image

The footie is back. Three weeks in and what have we learned so far?

Barcleys, boots and big names... the Prem is back.

Another season, another reason for making whoopee cushions and giving them to Spurs fans to cheer them up during the long winter afternoons ahead. What have we learned so far?

Big names are vital. Just ask the manager of the Man United shop. The arrival of Schneiderlin and Schweinsteiger has done wonders for the sale of repro tops and they’ve run out of letters. Benedict Cumberbatch, please join Carlisle United. They’re desperate for some extra income.

Beards are still in. The whole Prem is bristling with them, the skinniest, weediest player convinced he’s Andrea Pirlo. Even my young friend and neighbour Ed Miliband has grown a beard, according to his holiday snaps. Sign him.

Boots Not always had my best specs on, but here and abroad I detect a new form of bootee creeping in – slightly higher on the ankle, not heavy-plated as in the old days but very light, probably made from the bums of newborn babies.

Barclays Still driving me mad. Now it’s screaming from the perimeter boards that it’s “Championing the true Spirit of the Game”. What the hell does that mean? Thank God this is its last season as proud sponsor of the Prem.

Pitches Some groundsmen have clearly been on the weeds. How else can you explain the Stoke pitch suddenly having concentric circles, while Southampton and Portsmouth have acquired tartan stripes? Go easy on the mowers, chaps. Footballers find it hard enough to pass in straight lines.

Strips Have you seen the Everton third kit top? Like a cheap market-stall T-shirt, but the colour, my dears, the colour is gorgeous – it’s Thames green. Yes, the very same we painted our front door back in the Seventies. The whole street copied, then le toot middle classes everywhere.

Scott Spedding Which international team do you think he plays for? I switched on the telly to find it was rugby, heard his name and thought, goodo, must be Scotland, come on, Scotland. Turned out to be the England-France game. Hmm, must be a member of that famous Cumbrian family, the Speddings from Mirehouse, where Tennyson imagined King Arthur’s Excalibur coming out the lake. Blow me, Scott Spedding turns out to be a Frenchman. Though he only acquired French citizenship last year, having been born and bred in South Africa. What’s in a name, eh?

Footballers are just so last season. Wayne Rooney and Harry Kane can’t score. The really good ones won’t come here – all we get is the crocks, the elderly, the bench-warmers, yet still we look to them to be our saviour. Oh my God, let’s hope we sign Falcao, he’s a genius, will make all the difference, so prayed all the Man United fans. Hold on: Chelsea fans. I’ve forgotten now where he went. They seek him here, they seek him there, is he alive or on the stairs, who feckin’ cares?

John Stones of Everton – brilliant season so far, now he is a genius, the solution to all of Chelsea’s problems, the heir to John Terry, captain of England for decades. Once he gets out of short trousers and learns to tie his own laces . . .

Managers are the real interest. So refreshing to have three young British managers in the Prem – Alex Neil at Norwich (34), Eddie Howe at Bournemouth (37) and that old hand at Swansea, Garry Monk, (36). Young Master Howe looks like a ball boy. Or a tea boy.

Mourinho is, of course, the main attraction. He has given us the best start to any of his seasons on this planet. Can you ever take your eyes off him? That handsome hooded look, that sarcastic sneer, the imperious hand in the air – and in his hair – all those languages, he’s so clearly brilliant, and yet, like many clever people, often lacking in common sense. How could he come down so heavily on Eva Carneiro, his Chelsea doctor? Just because you’re losing? Yes, José has been the best fun so far – plus Chelsea’s poor start. God, please don’t let him fall out with Abramovich. José, we need you.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 27 August 2015 issue of the New Statesman, Isis and the new barbarism