Yen Sees Jump Following Announcement that the Next BOJ Governor is Ueda
According to the analyst from Crypto BitTribute, the yen has continued to see a major decline, especially when compared to Western currencies like the USD. As USD saw a short rise in prices, the yen continued to decline, in part due to the fact that the BOJ governor had still not been assigned.
However, as talks for nominating Kazuo Ueda have started to spread, there has been a surprising rise in the yen’s value. And as this government looks to tighten ultra-loose monetary policy, and are looking for someone who would help them further that goal.
Despite their looking to find someone like that, they were only able to find Ueda, who happens to also be a very popular choice among the public. And with news to appoint him spreading, the ruling party will not be able to rework monetary policy as they planned.
Ueda has gone on record saying that the current monetary policy is just fine and is in no need of improvement. This came as a major shock to many of the companies that were expecting an end to the fairly loose policy.
However, following the announcement that he made, much of the strength that the yen was able to garner happened to reverse.
The Struggle to Find a New Governor
After 10 years of serving as the BOJ governor, Haruhiko Kuroda took his leave from office, despite many arguing that he could have served for much longer. However, the decision for him to leave office was such a surprise, even to the members of his own party.
While many would agree that he was an excellent Governor, many within the Japanese Parliament were struggling to find a suitable replacement. Therefore, for a considerably long time, the country did not have a governor for the BOJ.
But with their latest selection for Governor of BOJ, it might be possible that they will have to find a replacement for Ueda as well. While being a popular choice among many citizens as well, he was able to make a serious mistake before even getting into office.
The result of the comments that he made was that the yen quickly sank against the dollar. Sinking as much as 1.2%, the value of the yen against the dollar was at 129.8. Of course, the effects of his decisions have had more drastic effects on the overall value of the yen.
Effects on Other Currencies
Following the news that Ueda was to become the new governor, there has been an incredible effect on the overall prices of various currencies. The biggest ones happen to be the euro and the sterling, both of which happened to fall by 1% against the yen.
The last time that they were down like this, they dropped by 0.9% and 0.6%. Even though some of the comments that he made did have a small negative impact on the overall value of the currency, the announcement of a new BOJ governor has allowed for some gains.
The yen was also able to gain against the Australian dollar, which had slipped to 0.7% in recent showings. As a result, many investors are quite happy to see the results of the current market.
The BOJ has Surprised Investors Once Before
This is not the first time that the BOJ has given investors a surprise, as they were able to make quite the splash as they increased the yields on their 10-year government bond yields to 0.5%, from an original 0.25%.
By doubling the above or below band for its target of zero, the BOJ gave the entire market a big surprise. Since that major change, many have been speculating that the BOJ could also be making changes to the yield curve control policy.
While they have denied that they will ever be making such a change, the truth of the matter is that many expect them to be keeping this decision under wraps.