Prime Minister Sanae Takaichi reaffirmed her pro-stimulus stance with the nomination of two reflationist academics to join the Bank of Japan policy board, proposed appointments that weakened the yen, boosted stocks and pushed up long-term bond yields.
Takaichi’s government on Wednesday named Aoyama Gakuin University professor Ayano Sato and Chuo University professor Toichiro Asada as its candidates to replace outgoing BOJ board members Asahi Noguchi and Junko Nakagawa. Noguchi’s five-year term concludes at the end of March and Nakagawa’s finishes in June.
The nomination of a pair of academics associated with reflationary economic policies is likely to fuel speculation that Takaichi will stick to a cautious position on the central bank raising interest rates quickly. The decision points to her determination to prioritize economic growth even if that pushes back against thinking in the market.