In the coming weeks, financial circles in Tokyo will be buzzing about who will replace Haruhiko Kuroda as governor of the Bank of Japan.
Kuroda’s 10-year term ends on April 8. Prime Minister Fumio Kishida is expected to announce Kuroda’s successor in February. Markets believe that it will be one of his two replacements, Masayoshi Amamiya or Masazumi Wakatabe.
However, Kishida would be wise to surprise the world by naming a woman instead.
The ten years that Kuroda ruled Japan’s monetary policy were a lost decade for Japan’s 126 million female population. and, in turn, tackling the gender inequality undermining Asia’s No. 2 economy.
It’s not Kuroda’s fault. But the past 10 years have been a cautionary tale of missed opportunities for the ruling Liberal Democratic Party, which hired him in 2013.
Every available study, from the International Monetary Fund to Goldman Sachs, shows that the countries with the highest use of female labor are lively, innovative, and productive. Not empowering women is the financial equivalent of tying a limb behind your back.
This self-goal dynamic finally emerged in Tokyo ten years ago. At the time, Prime Minister Shinzo Abe spoke early and often about the “women’s side” so that the other half of the population could develop and advance Japan’s economic game.
In 2014, Abe said that “businesses have been led by men’s ideas until now.” But half of the consumers are women. Introducing women’s ideas would lead to new innovations. If we understand a society where women shine, we can create a Japan full of vitality.
Abe’s LDP sets a national goal of filling 30% of leadership positions in public and private institutions with women by 2020. Unfortunately, politics itself has turned out to be a shiny object.
There was no mechanism to achieve the goal. No real incentives or punishments exist. CEOs and patriarchy generally continued business as usual. By 2016, the targets were lowered to 7 percent in senior positions and 15 percent in companies. Then they were largely forgotten.
It cannot go unnoticed how steeply Japan’s gender ranking has fallen over the past decade. In 2012, when Tokyo launched the Womenomics PR campaign, it ranked 101st on the World Economic Forum’s Gender Gap Index. By 2022, Japan will have fallen to 116th place, behind Burkina Faso, Tajikistan, and Guatemala.
Japan is now 14steps behind China, not exactly a place to publish women’s empowerment organizations. and 17 places behind South Korea, where Yoon Suk-yeol won the 2022 presidential election on an “anti-feminist” platform.
In terms of politics, Tokyo ranks 139th out of 146 countries. This leaves it behind Bahrain, Jordan, and Saudi Arabia. Investors can’t help but rejoice at how few Nikkei 225 companies have ever had a female CEO or president.
Even LDP’s alleged sexual activity requires a letter. Of course, the share of women in the workforce is increasing. But up to two-thirds of these positions are “non-regular,” offering less pay, fewer benefits, and negligible job security.
What better way to turn the tide than to name the first female BOJ head? The BOJ has never even had a female lieutenant governor. Breaking the cycle of an all-male appointment at BOJ headquarters could bring new perspectives to an institution that is fast losing confidence in global markets.
Look for BOJ inaction this week. In the 29 days since the BOJ changed its bond yield policy on December 20, traders have been bracing for a bold “tapering” move. In fact, the market was ready for Kuroda’s team to begin unraveling a decade of epic asset buying. The BOJ was pleased.
The point is, if a globally respected decision-maker like Kuroda, who enjoys considerable influence in Tokyo’s political circles, lacks the courage to even modestly change direction, should we trust the will of his successor?
In reality,Years of zero interest rates—aand the last 10 years of even more aggressive quantitative easing—have essentially caught the BOJ.
The “groupthink” that has long prevailed in the BOJ seems to have become even more entrenched. This means that the establishment is seriously afraid of being blamed for the collapse or cratering of the stock and bond markets. Things are likely to remain on autopilot if Tokyo replaces the central BOJ’s “safe” Kuroda.
Meeting a female governor can bring a new way of thinking into the mix. And there are really good candidates. Take, for example, Tokiko Shimizu, who in May 2020 became the first female director of a place founded in 1882. Her appointment to oversee international affairs at the BOJ marked a major step forward for a firmly male-dominated institution.
Think tank boss Yuri Okina tops the list of potential female candidates. So does former BOJ board member Sayuri Shirai, who has long proposed a policy overhaul that would allow officials to adjust interest rates more flexibly.
Along with fresh leadership, the appointment of a female BOJ chief would put Kishida’s party back on the attack when it comes to diversifying leadership. And why stop there?
Role models are important. Likewise, lead by example. Currently, there are only two women in Kishida’s cabinet, and they have less prominent roles. This is a metaphor for the tokenism that dominates the LDP. During the late Abe’s tenure as prime minister from 2012 to 2020—and the last one from 2006 to 2007—he appointed a few women here and there but always gave the best jobs to men.
Kishida, Abe, or reformist 2001–2006, Prime Minister Junichiro Koizumi did not appoint a woman as foreign or economic director or chief cabinet secretary. And with all due respect, how can anyone say that Kishida CFO Shunichi Suzuki was successful at his job? Why don’t you name the woman there too?
The top job at the BOJ is the perfect moment for Kishida to remind the world that his faltering government has a pulse and an idea of how to regain economic momentum.