With Finance Commissioner Mimura (三村) being discussed as a candidate for Governor of the Bank of Japan, the hurdles he must clear are coming into view. As a key figure behind coordinated intervention by Japan and the United States, the US side is signaling its intention to press the Bank of Japan to raise interest rates. Depending on how events unfold, his profile as a candidate could be significantly affected.
Finance Commissioner Mimura (三村) is being discussed as a candidate to become the next Governor of the Bank of Japan, and it has been pointed out that he will need to clear several hurdles to take up the post. Against the backdrop of his past role as a key figure behind coordinated intervention by Japan and the United States, the article describes his position with a view to the path ahead.
US Treasury Secretary Bessent (ベッセント) is said to be arguing that the Bank of Japan should move quickly to raise policy rates, which are too low relative to the inflation rate, and is calling for a shift in the Bank of Japan’s monetary policy as a condition for a Japan-US currency alliance. The Bank of Japan’s response is seen as key to correcting the yen’s weakness, with the need to stabilize inflation expectations and avoid excessive exchange-rate volatility being emphasized.
In terms of the market reaction, the view is spreading that the yen’s weakening trend cannot be fundamentally corrected unless the gap between Japanese and US policy rates narrows, and expectations are said to be growing that the Bank of Japan will proceed with an additional rate hike at its September Monetary Policy Meeting.
Meanwhile, Mimura (三村) is expected to be required to coordinate with the Bank of Japan and secure the approval of the Takaichi administration, and the article also presents the view that confirming him as the next governor could take time.