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Noah Smith

Japan Keeps the Right Person to Run Its Central Bank

Abenomics required an end to timid monetary policy. Haruhiko Kuroda is providing it.
Sometimes the status quo makes sense.

Sometimes the status quo makes sense.

Photographer: Stefan Wermuth/Bloomberg

It looks like one of the world’s best central bankers will get another term. Reports indicate that Japanese Prime Minister Shinzo Abe will nominate Haruhiko Kuroda for another term as head of the Bank of Japan. The decision to stay the course is just one more sign that things are going right in the Land of the Rising Sun.

It’s hard to overstate what a lousy state Japan’s economy was in before Abe and Kuroda arrived on the scene. The bursting of real estate and housing bubbles had led to a lost decade in the 1990s, and the 2000s had seen only an incomplete recovery. Growth in per capita incomes resumed, but wages stubbornly continued to fall, inequality rose, and the economy remained mired in deflation. The Great Recession dealt the economy a further blow, and just as it was recovering, an enormous earthquake and tsunami in 2011 devastated whole cities in the north of Japan, causing a nuclear disaster at Fukushima that temporarily shut down the country’s nuclear power plants. Hammered by nature, buffeted by the winds of the global economy, and weighed down by an aging and shrinking population, Japan was badly in need of dynamic, purposeful leadership.