June 2, 2014 / 9:41 AM / 6 years ago

UPDATE 1-Key BOJ monetary official Amamiya to be reappointed -sources

(Adds background on Amamiya and monetary affairs department)

By Leika Kihara

TOKYO, June 2 (Reuters) - The Bank of Japan will reappoint Masayoshi Amamiya, an architect of its quantitative easing, for a rare second term as an executive director to oversee a division that determines monetary policy options, people with direct knowledge of the process said.

Appointed as one of the BOJ’s six executive directors in 2010, the 58-year-old career central banker had overseen the powerful Monetary Affairs Department until May 2012 when he was sent to the bank’s branch in Osaka.

He was reappointed to oversee the monetary affairs department in March 2013 and helped Governor Haruhiko Kuroda to deploy the current massive stimulus programme a month later.

His four-year term as executive director, which remained in effect during his stint in Osaka, expires on Monday.

Amamiya’s reappointment ensures that responsibility for meeting the BOJ’s 2 percent inflation target remains in the hands of a veteran official known for his deep contacts with the finance ministry and lawmakers.

The BOJ’s nine-member board has the final say in monetary policy decisions, but the Monetary Affairs Department plays a key role in the process by hammering out policy options for the board.

The department would be central to any decision to ease policy further or taper the current policy of aggressive bond purchases.

Amamiya has been an architect of many of the BOJ’s unconventional policies to battle deflation, including a previous phase of quantitative easing that lasted until 2006.

Under Kuroda’s policy of quantitative and qualitative easing (QQE) put in place last April, the BOJ pledged to double base money via aggressive asset purchases to achieve 2 percent inflation.

With consumer inflation having topped 1 percent, Kuroda has repeatedly voiced confidence of meeting the target sometime next year. (Reporting by Leika Kihara; Editing by Edmund Klamann and Simon Cameron-Moore)

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