While former BOJ Governor Haruhiko Kuroda (黒田 東彦) supports continuing policy normalization, former Deputy Governor Masazumi Wakatabe (若田部 昌澄) has published a book warning against hastily raising interest rates, bringing the divergent policy views at the Bank of Japan into sharp relief.
Former Bank of Japan Governor Haruhiko Kuroda (黒田 東彦) and former Deputy Governor Masazumi Wakatabe (若田部 昌澄) have published books in succession. Starting from large-scale monetary easing, the two differ in their assessments of the interest-rate-hike phase, bringing the issues surrounding current policy management to the fore.
In a book published this month, Kuroda (黒田) clearly stated his support for the policy normalization pursued by Governor Kazuo Ueda (植田 和男). He presented the view that rate hikes that are too rapid could cool the economy, while hikes that are too slow could delay the completion of normalization, and outlined a forecast based on rate increases in 0.25% increments.
In a book published in September, Wakatabe (若田部) advocated a strategy of actively supporting aggregate demand and warned against hastily raising interest rates. He expressed the view that rate hikes amid weak real growth require an explanation, and also addressed their relationship with fiscal policy.
The two books link a review of the Abenomics era with issues surrounding the design of future monetary policy, encouraging debate over the appropriate conclusions as the Bank of Japan, under Governor Ueda (植田 和男), proceeds with rate hikes while moving toward the neutral interest rate.