The Bank of Japan Has a New Dissenter. This Time, He's a Dove

The Bank of Japan board has a new dissenter. But this time, he’s a dove.

In his first meeting since joining the board, Goushi Kataoka was alone in voting against the 8-1 decision Thursday to keep stimulus unchanged. That reflected his view that the monetary effects of the current yield curve control program are insufficient to spur price gains to the 2 percent goal within the BOJ’s stated time frame, a note to the statement showed. It didn’t mention any policy prescriptions from Kataoka.

Click here to read more about the policy meeting.

Kataoka, 44, and Hitoshi Suzuki, a former private-sector banker, replaced two staunch dissenters on the board. Takahide Kiuchi and Takehiro Sato, whose terms ended in July, were consistent voices of opposition to the radical stimulus policies of Governor Haruhiko Kuroda. Kiuchi argued that the benefits of Kuroda’s policies didn’t justify their costs, and would fade the longer it took to hit the BOJ’s price goal. Sato stressed the need for policy sustainability.

In a research paper last year titled "A Reboot of Reflationary Policy Is Wanted," Kataoka advocated for greater fiscal spending and a freeze on plans to increase Japan’s sales tax in 2019. Kataoka, who was an economist at Mitsubishi UFJ Research and Consulting Co. before joining the board, has previously suggested the BOJ consider additional easing to meet Japan’s 2 percent inflation target.

Goushi Kataoka

Source: Mitsubishi UFJ Research and Consulting

Kataoka’s willingness to vote against the majority may go some way to easing the concerns of some BOJ watchers, who worried that a loss of dissenting views on the board would end robust discussion. Kataoka’s position that the BOJ is not on course to reach its goals may revive debate in an unexpected manner, given that many observers had been focusing on the question of tapering or eventually exiting the current program.

At the time of his nomination, Yuji Shimanaka, an economist at Mitsubishi UFJ Morgan Stanley who has known Kataoka for two decades, said the new member would stand up against any premature talk of exit from stimulus.

His views are close to Deputy Governor Kikuo Iwata and fellow board member Yutaka Harada, Mari Iwashita, chief market economist at SMBC Friend Securities Co., said at the same time. "There’s no doubt that he’s a reflationist," she said.

Kataoka is the youngest member of the board. He finished the requirements for a Ph.D from Keio University and specializes in macro-economy, economic theory and the practical application of economics, according to a biography page that was on the Mitsubishi UFJ Research and Consulting website. It also said he was a member of the Keynes Society. 

— With assistance by Toru Fujioka, and Yoshiaki Nohara

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