While the coronavirus pandemic crisis has sparked concern over deflation to investors, the Bank of Japan (BOJ) is now facing a reshuffle in the chamber that could offset the balance in favor of more aggressive easing and testing of expanded policy tool limits.
On Wednesday, parliament approved governor candidate Asahi Noguchi, also known as a staunch supporter of more money, to join eight other BOJ policymakers in April.
He will replace Makoto Sakurai, whose five-year term will end in March. Sakurai has previously warned of rising costs due to continued easing.
For now, the central bank has no immediate plans to exit a very loose monetary policy as the economic impact of the coronavirus pandemic has pushed inflation well below the 2% target.
However, the presence of more dovish policymakers may complicate the BOJ's strategy to slow down the gradual purchase of assets and make the policy sufficient to survive in the effort to drive growth.
