The administration of Prime Minister Abe Shinzo chose a former executive of Toyota Motor Corp. to replace a board member from the Bank of Japan, who had opposed in October to expanded monetary stimulus.
Yukitoshi Funo, 68, one of the biggest beneficiaries of Abenomics, is a veteran chief of Toyota’s North American operations, who only needs now to be confirmed by both houses of the parliament, where Abe’s coalition holds the majority.
Before Abe came to office in 2012, Funo was publicly condemning the yen’s strength during the times when Bank of Japan’s Governor Haruhiko Kuroda sent the currency downfall with an unprecedented stimulus. If businessman Funo would work for the BOJ, he would be joining the nine-member panel at a time it is dealing with diminished inflation pressures due to cheaper oil.
Yasunari Ueno, an economist at Mitzuho Securities Co. said that “Given his experience in the auto industry, he’ll know a lot about currency markets and the global economy. People in the market will expect Funo to see gains in the yen as a significant risk for the Japanese economy.”
Funo has previously been in charge of Toyota’s Asian business outside of Japan and is at the moment an adviser to the car manufacturer. He would be replacing Yoshihisa Morimoto, who is a former executive at Tokyo Electric Power Co. and who will be ending his term at the end of June this year.
Last year in October, Morimoto voted against Governor Kuroda’s decision to increase the pace of asset purchases in the closest vote the Bank of Japan had registered since 2008. The decision, however, contributed to the yen’s losses, leading to bigger profits for exporters and increasing import costs which proved detrimental to small companies and households.
By Gabriela Florea