The Man They Call ‘Mr. BOJ’ Is Shaping Policy Behind the Scenes

  • Masayoshi Amamiya has been at the central bank for 37 years
  • He’s regarded as a potential candidate for governor or deputy

Masayoshi Amamiya.

Photographer: Tomohiro Ohsumi/Bloomberg

Masayoshi Amamiya is viewed as so essential to operations at the Bank of Japan that he’s known inside the central bank as "Mr. BOJ."

With the shift in recent months from a blitz on deflation to a long-haul campaign that’s set to outlast Governor Haruhiko Kuroda’s term, Amamiya is at the fore of managing interest rates and nudging consumer prices toward the BOJ’s distant 2 percent inflation goal.

The 61-year-old could also be among contenders in early 2018, when Shinzo Abe’s government considers replacements for Kuroda, 72, and his two deputy governors. Amamiya was approached about taking one of the deputy posts in 2012, but suggested instead his peer Hiroshi Nakaso, according to a person with knowledge of the matter who spoke on condition of anonymity.

Amamiya, the long-time head of the powerful monetary affairs department, joined the BOJ straight out of college and has been at the heart of policy making for decades.

First Passion

Yet his path to a career in central banking was far from assured. As a student at the prestigious Aoyama high school in Tokyo, the only course he ever failed turned out to be a chemistry class taught by the father of an official at the BOJ.

Amamiya’s first passion was classical music and he considered going to a conservatory after high school. This option closed when his parents intercepted his mail and hid the application forms. In the end Amamiya went on to study economics at the University of Tokyo.

Fast-forward to 2016 and he’s the most powerful official at the central bank outside of the nine-member policy board. His monetary affairs department drafts policy, and the markets division, which he also runs, has investors around the world on tenterhooks as it buys and sells financial instruments to implement that policy.

Crafting Strategies

"He’s a very talented person, with a good presentation style and skill in crafting all kinds of strategies," Etsuro Honda, an economic adviser to the prime minister, said in an interview. "He looks like a person of principle."

More so than other officials, Amamiya has a wide circle of contacts beyond the central bank among lawmakers, senior bureaucrats and economists of many different viewpoints.

"Among officials at the BOJ, he is most suited to be governor or a deputy governor," said Hideo Hayakawa, a former chief economist at the central bank who has known Amamiya since university. "Shrewdness is needed and he has that.” 

Amamiya’s ambitions beyond his current role aren’t clear, and his reputation for shaping and implementing policies determined from above, rather than setting the agenda, make it harder to judge his leadership credentials.

Honda, who is also serving as ambassador to Switzerland, and Takatoshi Ito, Kuroda’s former colleague who is now teaching at Columbia University, are also among names mentioned by private economists and government officials as possible contenders for governor.

Made in Tokyo

While his ancestral home is west of Tokyo in Yamanashi prefecture -- where one of his forebears was a 19th century railway baron -- Amamiya is very much a product of the capital.

He and his wife grew up in the same Tokyo neighborhood, went to the same schools and married soon after college. A love of music brought them together, and Amamiya’s wife succeeded where he didn’t: in getting into a conservatory.

Flexibility has been a hallmark of his approach, having served under governors with starkly different approaches to policy. Even so, Honda said Amamiya had discussed ideas like those on which Abenomics is based, even during the term of Kuroda’s predecessor, Masaaki Shirakawa, who had a far less aggressive approach.

He is now in his second stint as monetary-affairs head, an unusual occurrence. His previous time in the job covered the 2010 introduction of what Shirakawa called "comprehensive monetary easing."

A decade earlier, he led the department’s policy planning division, when the central bank raised interest rates, only to cut them again months later and adopt quantitative easing.

Some people wrongly assume that Amamiya is a monetarist who sees increasing the money supply as the one key to generating inflation, said Kyoji Fukao, a professor of economics at Hitotsubashi University who has known Amamiya since their college days.

"He’s ready to change, depending on the circumstances," said Fukao. "He thinks every theory has costs and benefits."

Hard Lessons

Lessons learned from early missteps during his career, including unsuccessful efforts by Japan to address the strengthening of the yen back in 1999, are said to have reinforced the importance to Amamiya of adapting to the times.

He was a strong supporter of the massive bond purchases that marked the start of Kuroda’s quantitative easing campaign in 2013, according to people with knowledge of talks inside the BOJ.

Amamiya wasn’t among the early advocates of the negative interest rate policy, but ultimately came around to supporting the measure that was announced in January, said the people.

When Kuroda announced a comprehensive review of policy in July, he turned to Amamiya and his lieutenants for a frank assessment of what had and hadn’t worked in the campaign to achieve 2 percent inflation.

They crafted the new framework Kuroda delivered in September, which shifted emphasis away from ever-greater asset purchases to a more subtle management of short-term and long-term interest rates.

Harsh Criticism

While some economists and investors welcomed the change for putting monetary policy on a more sustainable footing, it also attracted criticism that could affect Amamiya’s future.

Nobuyuki Nakahara, an adviser to Abe who was an intellectual father of the BOJ’s first run at quantitative easing in 2001, said the central bank’s actions risked harming the entire Abenomics project.

He described Amamiya an extremely talented official but not someone who leads from the front.

"His role has been to persuade other people after a new policy direction has been set," said Nakahara.

New York

Amamiya worked in the BOJ’s New York office in the late 1980s, when the U.S., Japan, France, Germany and the U.K. were trying to halt the decline in the dollar that they set in train with the Plaza Accord in 1985.

He also did a stint as branch manager in the Osaka office in 2012 that still generates speculation.

Some say he was banished to the regional position by Shirakawa and rescued by Kuroda. Others point to a simple desire to experience running a branch office. Yet another view is that the BOJ put him there to develop a relationship with Toru Hashimoto, the city’s then-mayor who was spearheading a new nationalist movement.

Whatever the answer, he’s back in the center of decision making during a new phase for the central bank. And he hasn’t lost his love of music.

Amamiya plays piano two or three times a week and is currently practicing a piece by Manuel Ponce for a private recital in December. He counts Sergei Prokofiev and Bela Bartok as his favorite composers.

Amamiya has even told friends that one day, when he retires, he wants to pursue a "quantitative theory of music" to discover why particular notes and tunes appeal to people.

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