Kazuo Ueda’s Debut in Front of Lawmakers

Kazuo Ueda, the incoming governor of the Bank of Japan, debuted in front of lawmakers recently, and his speech had something for everyone. Ueda’s first test as the new money man was to signal that he would stay the course set by his predecessor Haruhiko Kuroda. While traders initially focused on Ueda’s comments about a possible BOJ exit from easing, the real figure to watch is the Tokyo inflation for February, which is estimated to slow as government measures to reduce gas and electricity bills kick in dramatically.

Related Facts

• Kuroda’s term will likely be shaped far more by events than any philosophical bent Ueda may bring to the job.
• Ueda’s comments on inflation confirmed him as a member of Team Transitory, committing rather forcefully to a scenario in which inflation has already peaked in Japan.
• Ueda’s task is not to rock the boat and to stay the course set by his predecessor.

Key Takeaway

Kazuo Ueda’s first test as the new money man was to signal that he would stay the course set by his predecessor Haruhiko Kuroda. Ueda largely trod a path familiar to Federal Reserve chairs Ben Bernanke, Janet Yellen, and Jerome Powell at similar career points, emphasizing continuity and gradualism. The real figure to watch is the Tokyo inflation for February, which is estimated to slow as government measures to reduce gas and electricity bills kick in dramatically. Ueda is unlikely to tighten, and his term will likely be shaped far more by events than any philosophical bent he may bring to the job.

Conclusion

Kazuo Ueda passed his first test as the new money man before entering the office. His debut in front of lawmakers had something for everyone, and while Ueda stuck to a script that his soon-to-be-predecessor Haruhiko Kuroda could have written, his voice will come in time. Ueda is likely to stay the course set by his predecessor, and the real figure to watch is the Tokyo inflation for February, which is estimated to be dramatic slowly. Ueda is unlikely to tighten, and his term will likely be shaped far more by events than any philosophical bent he may bring to the job.