Analysis-Japan's Takaichi gets her doves in a row with BOJ board appointees

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};ge("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat($n)),notifLabel:document.querySelector(".".concat(Xn))};t.notifDropdown&&so(e,t)}))}()}};]]>By Leika KiharaThu, February 26, 2026 at 11:00 AM GMT+1 5 min readBy Leika KiharaTOKYO, Feb 26 (Reuters) - Japanese Prime Minister Sanae Takaichi's choice of two like-minded monetary doves to the central bank's board sends a not-so-subtle message about her distaste for higher interest rates, casting doubt on how much further policy can be tightened.The Ministry of Finance, which in the past had been involved in forming a list of candidates for the ‌post, was kept out of the loop with the premier holding her choice close to her chest, two sources familiar with the matter said.The nominations of academics Toichiro Asada and Ayano Sato ‌to the Bank of Japan board, made public on Wednesday, surprised some in the market who believed Takaichi's government would have opted for more moderate candidates, sending the yen lower.While the BOJ could still raise interest rates in coming months, the appointments may have long-term implications ​on the kind of battles awaiting a policy normalisation process that could take years, if not decades.Takaichi's hands-on approach to monetary policy heightens the chance her administration will add more reflationists to the BOJ's nine-member board when two more hawks see their term end next year, analysts say.If the dovish premier stays in power long enough, she would also have authority to pick the BOJ's new leadership when Governor Kazuo Ueda and his two deputies see their terms end in 2028 - potentially piling pressure on an institution that has seen political interference before."If the government tries to politicise the Bank of Japan then the same thing we've seen in the U.S. could happen in Japan, which is ‌bond selling as well as currency selling," said Yusuke Miyairi, FX strategist at ⁠Nomura Securities in London."I wouldn't say BOJ independence is threatened at the moment, but the government is trying to have more power in the BOJ's policy decisions," he said, adding the appointments shed more light on Takaichi's attitude to monetary policy.The nominations need approval of both houses of parliament to take effect. Takaichi's ruling coalition has a ⁠majority in the lower house, but needs votes from opposition lawmakers in the upper house, where it is a minority.MESSAGE CLEARAn academic known for advocating massive stimulus, Asada joins at the end of March to succeed dovish board member Asahi Noguchi.The other nominee, Sato, is also an academic who has preached the benefits of expansionary fiscal and monetary policy. 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