With the odds of Haruhiko Kuroda becoming Governor of the BOJ increasing, the Yen may post significant losses in the near-term.
The Japanese Yen Exchange Rate was in the region of 0.0109 against the US Dollar as of 11:56 am
It seems increasingly likely that the position of Governor of the Bank of Japan will go to Haruhiko Kuroda, currently President of the Asian Development Bank. Prime Minister Shinzo Abe is said to be pushing for the candidate, while members of the main opposition Democratic Party of Japan have also said they will back stimulus-supporting Kuroda.
Kuroda has been variously described as a ‘very capable candidate’ and a person with ‘the kind of experience and knowledge needed for Japan’s economy right now.’
If Kuroda gets through he will head a team of policy makers dedicated to driving the Japanese economy forward with additional monetary stimulus.
Although it is not yet known exactly what course Kuroda would take if he became BOJ governor, further easing could well form part of his ‘bold’ policy approach and the Yen could experience additional, significant declines as a result.
Robert Feldman, who heads Japanese economic research at Morgan Stanley MUFG Securities, commented: ‘I’m expecting smooth sailing. The new leadership of the Bank of Japan is going to have to announce some measures that amount to regime change in monetary policy.’
The anticipation of Kuroda taking the top job triggered widespread declines in the Yen on Monday, allowing it to hit a 33-month low against the US Dollar.
As one industry expert stated at the time: ‘The market seems to have formed an opinion that Kuroda is a dove and if he indeed becomes the new BOJ governor, he would be willing to do much more to support growth. The Yen is weakening on speculation there will be more policy easing.’
Since then the Japanese currency has experienced a slight rebound as risk appetite remains subdued following the inconclusive Italian elections and investors take time to consider the potential repercussions of new BOJ policies.
According to lawmaker Genichiro Sata, PM Abe will present his nominees for the BOJ governor and two deputy positions tomorrow.
Current JPY Exchange Rates
The Japanese Yen to Pound Sterling (JPY/GBP) exchange rate is trading at 0.0072
The Pound Sterling to Japanese Yen (GBP/ JPY) exchange rate is trading at 138.6940
The Japanese Yen to Euro (JPY/EUR) exchange rate is trading at 0.0083
The Euro to Japanese Yen (EUR/ JPY) exchange rate is trading at 119.9620
The Japanese Yen to US Dollar (JPY/USD) exchange rate is trading at 0.0109
The US Dollar to Japanese Yen (USD/JPY) exchange rate is trading at 91.6500
These exchange rates were correct as of 11:56 am
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