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 Yukitoshi Funo, a 68-year-old adviser to the auto giant, would
replace Yoshihisa Morimoto, a former utility executive who voted
against last October's surprise monetary easing, when his five-year
term expires at the end of June.
While little is known of Funo's view on monetary policy, he told
Reuters a yen at 80 or above against the dollar was too high back in
2011, when sharp rises in the yen were hurting an economy struck by
a devastating earthquake and tsunami.
His background as a sales executive at Toyota, which yields strong
influence on the government's exchange-rate policy and backs Abe,
may mean Funo will support any future proposals by Kuroda to expand
an already massive stimulus, some analysts say.
"Given his background, Funo could be sensitive to moves in the yen
and overseas markets. He may be supportive of further easing if a
strengthening of the yen pressures the BOJ to act," said Yasunari
Ueno, chief market economist at Mizuho Securities.
Having Funo on the board would ease pressure on Kuroda, who faced a
razor-thin 5-4 vote last October, when he pushed through a decision
to expand the monetary stimulus after having failed to convince
skeptics, including Morimoto.
Just weeks ago, Yukata Harada, an academic known for his
reflationist views, joined the board, which has been split between
Kuroda and his two deputies, who are adamant about meeting inflation
targets, and other members, who are cautious of acting again just to
accelerate inflation.
Analysts say the changes in the board's composition will give Kuroda
enough votes to more comfortably approve further monetary easing
from July onward.
ABE'S INFLUENCE SEEN
The government followed the usual practice of naming a business
executive to replace a board member who came from business circles.
However, it was the first time a person has been nominated from a
manufacturer of consumer goods, surprising some in the BOJ due to a
potential conflict of interest given Toyota's history of lobbying
policymakers for steps to weaken the yen.
A fluent English speaker with an MBA from Columbia University, Funo
spent more than a decade working at Toyota's North American
operations, overseeing the automaker's rapid expansion in its most
profitable market.
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Funo had the trust of President Akio Toyoda while executive vice
president at the automaker, where his responsibilities included
government and public relations during Toyota's recall crisis in
2010.
Several names, including another academic who held similar views to
Kuroda on reflation, were floated as potential candidates before
Funo was eventually chosen, say government sources with knowledge of
the matter.
President Toyoda's close personal ties with Abe suggests the
premier's views had strong influence in the selection process, the
sources said.
The nomination must be approved by Diet, though this is a near
certainty as Abe's coalition holds a solid majority in both houses
of parliament.
Two years into the BOJ's radical experiment to revive the economy
through massive purchases of government bonds and other assets,
inflation has ground to a halt and economic growth remains fragile,
casting doubt on the central bank's strategy to pull the country out
of decades of deflation.
The BOJ will issue its semi-annual report on the economic and price
forecasts at its next rate review on April 30. If approved by
parliament, Funo will join from July, when the bank will conduct a
quarterly review of these projections.
(Additional reporting by Sumio Ito and Yoshifumi Takemoto; Editing
by Chris Gallagher, Kim Coghill, Shri Navaratnam and Simon
Cameron-Moore)
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