Japanese Lawmakers Closely Watching Fate of Abenomics

Jiji Press

10:30 JST, February 16, 2023

TOKYO (Jiji Press) — Ruling and opposition lawmakers are closely watching the fate of the Abenomics pro-growth economic policy after the government nominated economist Kazuo Ueda to become the next governor of Bank of Japan.

They are poised to look into what Ueda’s plans are for current BOJ Gov. Haruhiko Kuroda’s massive monetary easing initiated under the late former Prime Minister Shinzo Abe’s Abenomics policy during confirmation hearings.

The government of Prime Minister Fumio Kishida nominated Ueda Tuesday to replace Haruhiko Kuroda, whose term as governor of the central bank ends on April 8. A hearing by the House of Representatives, the lower chamber of parliament, is expected to take place as early as Feb. 24.

Many members of the ruling Liberal Democratic Party, especially those who were close to Abe, want Ueda to uphold Abenomics.

“At this moment, there is no need to change the monetary easing policy,” said Hiroshige Seko, a senior member of an LDP faction previously led by Abe.

Another LDP lawmaker who served as a senior member of the Abe administration expressed opposition to revising a 2013 joint statement between the government and the BOJ seeking to achieve 2% inflation, saying that “would be denying Abenomics.”

Kishida has reassured senior members of the Abe faction that the basic stance of the BOJ’s monetary policy will be maintained under the new governor. At the same time, however, he also has pointed to the insufficiency of Abenomics.

The largest opposition Constitutional Democratic Party of Japan has been criticizing Abenomics.

CDP Secretary-General Katsuya Okada said, “What we need now is to scrutinize the ultraeasy monetary policy conducted under Abenomics.” He stressed the need to watch when the BOJ starts normalizing monetary policy.

“We’ll question [Ueda] about how he intends to clean up after injecting massive money while minimizing the impact” of the effort,” CDP parliamentary affairs chief Jun Azumi said at a party meeting.

Among other opposition parties, Nippon Ishin no Kai (Japan Innovation Party) and the Democratic Party for the People are calling for keeping the monetary easing policy in place.

Takashi Endo, Nippon Ishin’s parliamentary affairs chief, said, “Making a sudden turn on a steering wheel causes an accident.”

DPFP leader Yuichiro Tamaki welcomed the nomination of Ueda and voiced hopes that he will steer monetary policy in a way that will help achieve sustainable wage increases.