The risk of significant JPY appreciation this year has fallen with Ueda’s nomination – Commerzbank

The Japanese government nominated Kazuo Uedo to become the next governor of the Bank of Japan (BoJ). The Yen reacted in a relaxed manner. Economists at Commerzbank believe that the case for a substantial JPY appreciation has diminished. 

Ueda’s nomination as BoJ governor confirmed

“Interestingly enough USD/JPY is trading more or less exactly at the same levels as seen on Friday before Ueda’s potential nomination was leaked. That is probably justified as Ueda is likely to be exactly the candidate who will maintain the uncertainty about the BoJ's future course.”

“The risk of significant JPY appreciation this year has fallen with Ueda’s nomination. But for now, there is stil residual hope that in the future Japanese monetary policy will be less expansionary while neither inflation nor Ueda send out clear signals. Correspondingly, JPY still trades approx. 3.5% stronger against USD than it did prior to the December decision.”