REPEAT: MNI INSIGHT: BOJ Easing Cautious Despite New Blood -2-

Repeats Story Initially Transmitted at 05:34 GMT Mar 15/01:34 EST Mar 15

By Hiroshi Inoue 

     TOKYO (MNI) - The Japanese central bank already has a reflationist board

member.

     Goushi Kataoka has dissented for the fifth straight meeting after taking

office in July. He has argued that additional easing will be necessary to

achieve the 2% inflation target at an early stage, but hasn't proposed any

specific policy action.

     BOJ officials believe that the combination of Wakatabe and Kataoka is

unlikely to have a strong influence on policy decisions, MNI understands. The

vote by the nine-member board has been 8-to-1 recently to maintain its monetary

easing stance under the yield curve control framework.

     Amamiya's nomination is welcomed by his colleagues as he is specialized in

monetary policy-making and familiar with financial markets.

     Amamiya was promoted to one of the six executive directors in 2010, charged

with monetary policy-making, and moved on to head up the BOJ Osaka branch in

2012. In early 2013, he was called back to the Tokyo head office, just in time

for drafting aggressive easing plans under Kuroda.

     As for his move to Osaka, there are two theories.

     One is that the then-governor Masaaki Shirakawa removed Amamiya from the

core of the policy-making process because the latter was advocating more easing

while the former was much more cautious.

     The other is that Shirakawa sent Amamiya to Osaka, a commercial hub in

western Japan, so that he could develop closer relationships with business

leaders.

     -- AMAMIYA REAPPOINTED

     In a rare move, Amamiya was re-appointed as executive director in 2014 to

continue supporting the conduct of monetary policy under Kuroda.

     Initially, Amamiya didn't support the negative interest rate policy because

of expected adverse effects on lender profits but in the end agreed with

Kuroda's view to adopt it at the January 2016 meeting.

     This episode makes former senior BOJ officials believe that Amamiya, as

deputy governor, would stick to Kuroda's policy stance, neither proposing more

easing nor calling for an early exit from large-scale easing.

     In the past, Amamiya was also involved in ending the zero interest rate

policy in 2000 and introducing quantitative easing in 2001. He was also at the

core of policy-making when the BOJ switched the target back to interest rates

from asset purchase amounts in 2006.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com