What next for the Bank of Japan?

The election of an LDP-led government would be unlikely to result in the dramatic shift in policy at the Bank of Japan than many now seem to expect. Proposals that threaten the independence of the central bank will probably be dropped. And for all the speculation that Governor Shirakawa would be replaced by someone more “dovish”, the reality is that Japanese monetary policy is already very loose and will almost certainly remain so regardless of who heads the government or the central bank.