Former Mitsubishi exec Kazuyuki Masu tapped for BOJ board as economic challenges loom

TOKYO, JAPAN: Prime Minister Shigeru Ishiba nominated a former Mitsubishi Corp. executive to join bank of Japan’s board at the end of June, offering a new voice at the central bank as it navigates intensified uncertainty as US President Donald Trump’s tariff campaign to evolve.

According to Bloomberg, the government tapped the 66-year old Kazuyuki Masu as Ishiba’s second selection for one of the nine seats on the BOJ board, according to a document released to reporters in parliament in Tokyo on Thursday. Masu would replace Toyoaki Nakamura, a former Hitachi Limited executive, whose five-year term ends on June 30.

The nomination comes after Trump’s volatile back and forth on tariffs, creating risks for Japan’s already modest economic recovery. BOJ Governor Kazuo Ueda has been intent on normalising policy settings after ending the world’s last negative rate policy in March 2024. BOJ watchers are now questioning if Ueda will be able to raise interest rates again this year. Ahead of the tariff announcements, some had forecast a hike as soon as the next policy decision on May 1.

“Masu will join at a difficult time for the BOJ as central bank must monitor the impact of the tariff measures and it’s not clear how long that will take,” said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities Co. “Coming from a trading house, he will probably take into account a global perspective among other things. Chances are low at least that he’ll hawkish from the get go.”

After hitting Japan with 24 percent tariffs across the board on Wednesday, Trump paused parts of the so-called reciprocal levies for 90 days. A 10 percent overall tariff will still remain, as will a 25 percent duty on cars, steel and aluminum.

Almost 90pc of Japanese companies see Trump as bad for business, Reuters survey shows

The outgoing Nakamura had dissented on every major decision for a policy shift during Ueda’s term, mainly citing the dynamic of the voting,” said Muguruma.

This would be the second personal change of the year after former professor Juniko Koeda joined the board in late March. The slate typically includes at least one representative from corporate Japan, and Masu’s pick to replace ex-Hitachi executive Nakamura continues the practice.

With Ishiba’s ruling coalition lacking a majority, there’s a risk the nomination could fall short in parliament as both the lawyer and upper houses must approve the pick.

In a speech on Wednesday, Ueda highlighted rising uncertainties stemming from the trade policies, while maintaining the posture that the BOJ would lift rates if its economic outlook is realised.

Ueda’s remarks followed those earlier this week from a key opposition party leader, Yuichiro Tamaki, who raised the prospect of rate cuts if the tariff measures smother the economy.