Bank of Japan Governor Masaaki Shirakawa announced on Tuesday that he will step down on March 19, three weeks ahead of the expiry of his term.
Shirakawa told reporters in Tokyo that he would step down on the day when the other two deputy governors' term end so that new governor and deputy governors can start simultaneously. Other central bankers whose term ends on March 19 are Hirohide Yamaguchi and Kiyohiko Nishimura.
The BoJ Chief said that he has notified Prime Minister Shinzo Abe about his intention to quit early. The governor's term expires on April 8, 2013. He has been holding the post since April 2008.
Coming under pressure from the government led by the conservative Liberal Democratic Party, Shirakawa last month doubled the inflation target to 2 percent in a bid to end deflation. Until 2012, Shirakawa had ruled out such a move saying that the rate will be too high for Japan.
The central bank also announced a Federal Reserve-style asset purchase program that is set to start in January 2014.
The Japanese premier has identified ending deflation as his primary goal. He wants the central bank to accept responsibility for a 2 percent inflation target.
Abe prefers a candidate for the post who is willing to ease monetary policy aggressively. Among the possible successors to Shirakawa are the Asian Development Bank President Haruhiko Kuroda and a former BoJ deputy governor Toshiro Muto.
The increasing sway of Abe in monetary policy making has caused concerns over the central bank's independence.
The appreciation of the yen over recent years dampened the competitiveness of exporters and hurt Japan economy. The government approved a record budget for the fiscal 2013 that envisages spending cuts, the first time in seven years, and a reduction in new bond issuance.
by RTT Staff Writer
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