The reported appointment of well-known monetary reflationist Yasushi Harada to the Bank of Japan (BOJ) board has ignited fresh speculation of more easing from the central bank.
"This looks like a piece of good news for those expecting additional easing actions by the BOJ," said Credit Suisse economist Hiromichi Shirakawa in a note. Harada is a "well known as a monetary reflationist;" if he joins the nine-member BOJ board, "Governor Haruhiko Kuroda is likely to be able to continue to secure at least five votes for an easing action."
Prime Minister Shinzo Abe's government will nominate Harada, a Waseda University economist, to replace fellow dove Ryuzo Miyao, who will step down when his term ends on March 25, the Nikkei reported without citing sources.
"The news is a signal from the government that there is continuity on monetary policy," said Mizuho Securities' Chief Market Economist Yasunari Ueno.
Miyao was one the five board members who supported last October's decision to expand asset purchases to 80 trillion yen ($679 billion). The move surprised markets, sparking a stock market rally and sending the yen lower against the U.S. dollar.
The central bank's 2 percent inflation target remains elusive; in December, consumer inflation slowed for a fifth straight month to 0.5 percent, excluding the effects of last April's consumption tax hike.