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

Both nominees belong to ​a ​group of reflationists who have advocated expansionary fiscal and monetary proposals now flagged by Takaichi, and have ties with dovish ​former BOJ executives like ex-deputy governor Masazumi Wakatabe.

STACKING THE BOARD

To be sure, the appointments ‌are unlikely to directly affect the BOJ's near-term policy decisions. The nominees won't join its meeting in March.

Asada, as a newcomer, is unlikely to rock the boat at his debut meeting on April 27-28, while Sato's first chance to participate will be the rate review in July.

The views of the newcomers may also change as they face the realities of deciding policy in the face of volatile markets, economic uncertainties and unexpected shocks, said former BOJ official Nobuyasu Atago.

"Once they join, the board members shed their ideologies and become more practical," said Atago, who served as staff of a BOJ board member during his stint at the central bank.

"BOJ staff would barrage them with briefings, which could be overwhelming for newcomer academics," he said. "I think yen moves matter far more than the Takaichi nominations."

The most recent example is board member Noguchi, who joined the board as a strong proponent of ‌aggressive monetary easing, but shifted course and voted for the BOJ's past two rate hikes.

Still, the newcomers will likely affect ​the policy debate by changing the composition of the board, which has increasingly shifted in favour of a near-term rate hike as ​the yen's downtrend keeps food inflation stubbornly high.

Noguchi is seen as the last of the once-dominant reflationists, ​who gained power by providing the theoretical backbone of former premier Shinzo Abe's "Abenomics" stimulus policies.

Two hawkish board members, Naoki Tamura and Hajime Takata, have been vocal in their calls ‌for further, near-term rate hikes with Takata unsuccessfully proposing rate hikes in January for ​a second straight meeting.

While there is uncertainty on how ​the two newcomers may position themselves on the board, the biggest impact may come from the explicit, dovish message Takaichi delivered with the nominations, analysts say.

The Nikkei newspaper reported, without citing sources, that Takaichi had voiced displeasure over the BOJ's December rate hike to people around her, fretting over the impact on mortgage rates and capital expenditure.

Given the huge political capital Takaichi gained from her party's landslide ​victory in an election earlier this month, it would be hard for the BOJ ‌to push through rate hikes without consent from the administration, analysts say.

"Up till now, the Takaichi administration didn't send clear communication on its view on monetary policy," said Takahiro Otsuka, senior ​fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

"This nomination is a message it is pursuing a high-pressure economy," focusing on reflating growth, he said.

(Reporting by Leika Kihara; additional ​reporting by Tamiyuki Kihara, Makiko Yamazaki and Kentaro Sugiyama and Alun John in London; Editing by Sam Holmes)