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The nomination of Haruhiko Kuroda, a Finance Ministry veteran who is president of the Asian Development Bank, to become Japan's next central bank governor has further lifted sentiment. Kuroda has expressed strong support for Abe's economic strategy and for quickly achieving a 2 percent inflation target set by the central bank and government in January. So far, prices have shown no signs of rising. "It is a near certainty that policy will be eased further in April," Julian Jessop, chief economist for London-based Capital Economics, said in a commentary late Thursday. However, he said Kuroda's policies would be unlikely to differ much from the current Bank of Japan governor, Masaaki Shirakawa, despite perceptions that Shirakawa favors a less aggressive policy approach. The bank may increase the size of asset purchases meant to stimulate the economy, and lengthen their maturity, he said. But "most of the more radical options, including purchases of foreign bonds and setting a two-year horizon for the inflation target, are unlikely to gain sufficient support, all of which is setting up the markets for some major disappointment," Jessop said.
[Associated
Press;
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