Prime Minister Shinzo Abe nominated an advocate of aggressive policy action to head the Bank of Japan, challenging the opposition to back his push for radical action as officials warned that a nascent economic upturn could easily be derailed.
By choosing Asian Development Bank President Haruhiko Kuroda to take over at the central bank, Abe is looking to deliver on an election pledge of overhauling monetary policy to revive the economy after nearly two decades of mild deflation and lacklustre growth.
"The new BoJ needs to accelerate its pace of asset accumulation and extend the maturities of government debt that it is buying," said Masayuki Kichikawa, chief Japan economist at Bank of America Merrill Lynch. "By strengthening monetary easing, the BoJ will be able to stabilise the yen exchange rate. Then we will begin to see some positive impact on consumer prices from next year."
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