2016 All-Japan Research Team: Economics, No. 2: Tomochika Kitaoka

Tomochika Kitaoka

Mizuho Securities Group

First-place appearances: 0

Total appearances: 4

Team debut: 2013

Mizuho Securities Group’s Tomochika Kitaoka holds on to the No. 2 position he first captured in 2014. He is counseling clients that although the Bank of Japan’s surprise decision in January to adopt a negative interest rate policy emphasizes governor Haruhiko Kuroda’s “willingness to achieve a 2 percent inflation target,” more “drastic change” is necessary to stimulate domestic output. With effect from mid-February, the central bank cut its benchmark rate on certain reserves that financial institutions maintain at the BoJ from 0.1 percent to –0.1 percent, while holding its assets-purchase program at an annual ¥80 trillion ($705 billion). A rate of –0.5 percent or even –1 percent, perhaps coupled with an expansion of the Japanese government-bond repurchase scheme, “may be more powerful” and maintain the yen at a comfortable level at the same time, the researcher contends. Kitaoka, 39, also favors a return to what he calls “original” Abenomics, proposing that “monetary policy can support fiscal stimulus or a freeze in the sales tax hike as a radical action, if necessary.” Investors should “be patient, as Japan will be supported by a decline in the price of oil, with ¥5 trillion of additional benefit in 2016; and be flexible, as our policy assumptions can change suddenly,” he advises. “In this very volatile time, he has been very consistent and thoughtful,” observes one fund manager. “His responses have been well measured in an economic environment very much riddled with uncertainties.”