'Man from Toyota' may give BOJ's stimulus a reality check

By Leika Kihara and Norihiko Shirouzu TOKYO/BEIJING, April 30 (Reuters) - It's a long way from Toyota Motor Corp's U.S. showrooms to Japan's central bank boardroom, but Yukitoshi Funo will bring a dose of real-world pragmatism to the Bank of Japan. The bank's latest board nominee probably doesn't yet have a strong view on monetary policy, say people who know him, but he's already preparing for the job by reading a book by outspoken former BOJ deputy governor Kazumasa Iwata. What Funo, 68, will bring to the BOJ board, and the debate over its radical monetary experiment, is a realism born from more than four decades at Toyota, including running the world's biggest automaker's huge U.S. sales operations. "It's good to have someone who can do a reality check" on what the BOJ is doing and how it is communicating policy, said one official familiar with the central bank's thinking. And what he doesn't yet know about the technicalities of monetary policy, he'll be quick to learn. With an MBA from Columbia University and fluent English, Funo defies the stereotype of a risk-averse Japanese businessman, and he's not shy about asking tough questions, say people who have worked with him at Toyota. "He's good at discerning what risks you should take and what risks you should avoid," said a former Toyota executive. Funo, whose appointment is expected to be rubber-stamped by parliament next month, didn't respond to a request for comment. BOARD TILT Thoughtful and well-read - biographies say he also likes to visit art museums - Funo rose through the Toyota ranks under Hiroshi Okuda, a charismatic former CEO who led an aggressive drive to boost Toyota's global market share. Belying a professorial public profile, "Yuki" has been known to bang a fist on the table when faced with incompetence. As head of Toyota's U.S. sales unit in 2003, Funo set bold sales targets that perplexed some bosses, and didn't hesitate to take on the Big Three U.S. auto makers on their home turf. Analysts say Funo will tilt the Bank of Japan board's balance in favour of Governor Haruhiko Kuroda, as he succeeds Yoshihisa Morimoto, a former utility executive who was among four dissenters at last October's surprise monetary easing. Two of the nine BOJ board seats have traditionally been filled by former business executives, though Funo will be the first to come from a consumer products maker. CONFLICT OF INTEREST? Now an adviser to Toyota, Funo brings a distinctive corporate culture, such as the "Five why's" rule that urges employees to ask themselves at least five times why a case has succeeded or failed, before jumping to conclusions. He arrives at the BOJ at a tricky time. The bank missed a two-year timeframe for hitting its 2 percent inflation target as price growth grinds to a halt on falling oil costs and soft consumption. While Kuroda insists the BOJ is ready to top up its asset purchases further, some on the board doubt whether pumping in money more forcefully can accelerate inflation. Some analysts say Funo's background will see him lean toward policies that help weaken the yen, or at least stem sharp yen gains that hurt manufacturers. Others point to a potential conflict of interest, noting how Toyota pressured policymakers to act when a yen spike hit exporters reeling from supply chain disruptions after the March 2011 earthquake and tsunami. BOJ officials, however, note that no board member has voted in such a way as to suggest they were serving their company's interests. Instead, they welcome Funo's nomination as bringing balance to a board dominated by academics, economists and bureaucrats. "What's key is that the government didn't choose another reflationist to fill a BOJ post, and picked someone without a strong view on monetary policy," said Masamichi Adachi, senior economist at JPMorgan Securities and a former BOJ official. "It may be the government telling the BOJ it has done enough easing for now, and that it shouldn't go to extremes." (Additional reporting by Chang-Ran Kim; Editing by Ian Geoghegan)

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