VIEW: J.P.Morgan: New Board Member Nominees To Make Board Less Reflationist

Nominees To Make Board Less Reflationist
In the wake of Tuesday’s BoJ board nominations J.P.Morgan suggest that “from July the balance of the reflationist view - centrist view among the Board members likely will change from 4 reflationists (Kataoka and Deputy Governor Wakatabe are in this group) - 5 centrists (Kuroda, the most dovish, and Suzuki, the most hawkish, are in this group) to 3 reflationists - 6 centrists (Takada and possibly Tamura will be members). We don’t expect this will change the BoJ’s policy stance this year as Kataoka’s easing proposal has not been realised up to now. But Kishida’s stance suggests that Kuroda’s successor from April 2023 likely will not be a reflationist like Wakatabe, but more likely will be a centrist, possibly a bit more hawkish than Kuroda. Markets seem to be considering either current Deputy Governor Amamiya or the former Deputy Governor Nakaso as a possible successor for Kuroda. We should pay attention to the BoJ’s stance under the new Governor in 2023, and expect it will first continue with Kuroda’s stance but gradually take growth and financial system factors more into account.”