MUFG research chief Derek Halpenny highlights the renewed underperformance of the Japanese yen following Prime Minister Takaichi’s appointment of relational scientists Toichiro Asada and Ayano Sato to the BoJ program board. Markets are pricing in a 15 basis point tightening of the BOJ’s monetary policy in April, but MUFG warns that the upcoming speech by Deputy Governor Himino will be crucial to confirm this scenario, and failure to confirm it could result in further weakening of the Japanese yen against USD/JPY and the G10 more broadly.
The BoJ’s nominations reinforce the downward bias of the yen
“However, today (and yesterday) the results were clearly weaker and so is the yen, and the government today announced its picks to succeed Asahi Noguchi at the end of March and Junko Nakagawa at the end of June.”
“Assad is well known for his relational views, having co-authored a paper with former Deputy Governor Wakatabe in the past.”
“BoJ monetary tightening of 15 basis points is priced in for April, and it will be crucial whether this valuation is approved in the coming weeks.”
“If an April increase is considered, we would expect Himino’s tone to be at least consistent with that possibility.”
“If it fails to do so, there is an increased risk of further yen selling.”
(This article was created with the aid of an artificial intelligence tool and has been reviewed by an editor.)
