A Tumultuous Kuroda Era Reverberated Way Beyond Japan
The outgoing central bank governor’s battle against deflationary mindsets was exhausting, but it burnished his reputation as an innovator trying to snap the country out of its funk.
End of an era.
Photographer: Kiyoshi Ota/BloombergHaruhiko Kuroda changed Japan in crucial ways during his decade atop the country’s central bank. His successor will find it hard to undo the legacy, assuming he even wants to. Kuroda was a revolutionary in the cause of reflating an economy that once was lauded for possessing a secret sauce to, briefly, challenge the US for financial supremacy. Some of his innovations have stored up trouble for the future — and probably not just in Japan.
To truly appreciate the impact of Kuroda’s tenure, we need to travel back to late 2012 and early 2013. Shinzo Abe had just led the longtime ruling party back to government after three years in the wilderness. He sought a major shake-up: monetary, fiscal and regulatory. The first of those arrows was vital to fending off deflation, and in Kuroda, he found his man. Predictions that the avuncular, lifelong bureaucrat would champion a gradual evolution in policy were wrong. (I was skeptical myself that his leadership would be quite so eventful.)
Kuroda’s two tumultuous five-year terms are in their final days, and a valedictory press conference has been penciled for Friday. The fear of falling prices has been greatly diminished. Inflation, after a long absence, is a hotter topic. Not all of this about-face was Kuroda's doing; he had a powerful assist from forces beyond Japan. But he never stopped trying new ways to lift inflation toward, and beyond, the 2% target that Abe wrestled the Bank of Japan into accepting.