The surprise nomination of academic economist Kazuo Ueda to succeed Mr Haruhiko Kuroda as governor of the Bank of Japan (BOJ) when the latter’s term ends in April could mark the beginning of the end of a decade-long experiment in monetary policy that could have ramifications that go beyond Japan.

Japan’s monetary policy is at an inflexion point. Under Mr Kuroda it has been focused on fighting deflation through a near-zero interest rate policy. The BOJ also kept a cap of 0.25 per cent on long-term bond yields, which it maintained even after the US Federal Reserve and other major central banks started raising interest rates in 2022. Although it raised the cap to 0.5 per cent in December, it is still running an easy monetary policy at a time when other central banks are tightening.