By Leika Kihara

TOKYO, Reuters – The Bank of Japan has reappointed Haruhiko Kuroda as a senior technocrat to oversee the massive monetary stimulus. This will allow the bank to exit the radical policies of the governor.

Shinichi Uchida (59), who spent the majority of his professional career in the BOJ’s elite financial affairs department was integral in the creation Kuroda’s 2013 “bazooka” asset-buying program and 2016 negative interest policy.

These policies portray Uchida as a supporter of monetary stimuli, but Uchida was also responsible for the BOJ’s efforts to reduce its massive bond buying. In 2016, Uchida introduced yield curve control. This policy not only capped long-term interest rates at zero, but also allowed the central bank to stop buying bonds at a certain pace.

Uchida helped to create steps that would slow down the BOJ’s purchase of risky assets, and relieve the banks’ strain from low interest rates.

This month’s announcement of Uchida being reappointed as the BOJ executive director for a fourth year will see him continue to oversee the design and implementation of monetary policy well past the April end.

Uchida has the technical experience and technical knowledge to ensure that the decommissioning of YCC will happen smoothly whenever it does. His bipartisan nature will also mean that he will not be a hindrance to Kuroda’s stimulus rollback, according three people familiar with the matter.

Mari Iwashita is chief market economist at Daiwa Securities, and an experienced BOJ watcher.

“That is his strength as well as his speed at changing policy when needed.”

Six executive directors are appointed by the BOJ to assist in key decisions. These positions are very sought-after and only a few top BOJ employees can apply for them.

Uchida is being reappointed for the second time in a row. In the past, such posts are only valid for four years.

NEITHER HAWK NOR DOOVE

Uchida worked in the monetary department for most of his professional life. His talents included designing policy frameworks that were complex and helping to manage transitions within BOJ leadership.

According to his friends, Uchida has a sharp mind and performed well under the two dovish Kurodas and Masaaki Shirakawa who were wary about increasing stimulus levels too quickly.

One person said that he was a genius at crafting complex policy ideas. He is difficult to label as either a hawk, or dove.

Uchida has the ability to plan for YCC’s eventual end or prolongation.

It is true that the BOJ does not want to pull stimulus. Instead of worrying about high inflation, its focus is on supporting a fragile recovery.

Some in the BOJ worry about Japan’s isolation in global central bank shifts towards tighter monetary policy.

The BOJ’s Japan-based inflation is comparable to that of other countries, so it can keep rates lower for longer periods than counterparts. However, close to consensus exists within the bank to reduce, not increase, its stimulus. Sources say.

The task of unravelling YCC is difficult. It involves a complicated network of measures that keep rates low and deal with the side-effects from prolonged easing.

Sources say that the BOJ spends many years thinking up possible moves, and Uchida will be heavily involved.

According to a second source, “The BOJ must be available if there is any chance that policy will be modified in the longer term,” said a third source. Uchida will definitely play an important role in this process.