# Japanese yen gains as Ueda set to be named next BOJ governor
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-10
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: Yen rises as Ueda set to be new BOJ governor, dollar gains on inflation outlook
Meta Description: Get the latest update on the yen's movement following Kazuo Ueda's potential appointment as the next Bank of Japan governor. Stay informed with
URL: https://financedigest.com/japanese-yen-gains-as-ueda-set-to-be-named-next-boj-governorhtml

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(Adds comment, U.S. data, NEW YORK dateline, byline, FX table, bullets, updates prices)

By Samuel Indyk and Gertrude Chavez-Dreyfuss

LONDON/NEW YORK (Reuters) – The yen rose across the board on Friday with Kazuo Ueda reportedly set to become the next Bank of Japan (BOJ) governor but pared [gains after he said the central bank’s](https://www.financedigest.com/asian-shares-gain-as-fears-about-rapid-fed-hikes-bank-crisis-fade.html "Asian shares gain as fears about rapid Fed hikes, bank crisis fade") monetary policy was appropriate.

The dollar, however, trimmed losses against the yen and extended [gains versus the euro after the University of Michigan surveys showed a one-year inflation outlook](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook") of 4.2%, higher than the final number in January. The overall [index of consumer sentiment](https://www.financedigest.com/credit-suisse-to-launch-the-credit-suisse-ravenpack-artificial-intelligence-sentiment-ais-index.html "Credit Suisse to launch the Credit Suisse RavenPack Artificial Intelligence Sentiment (AIS) Index ") came in at 66.4, up from 64.9 in the prior month.

Federal Reserve Chair Jerome Powell has cited the Michigan survey’s [inflation outlook](https://www.financedigest.com/britains-next-sees-lower-clothing-inflation-shares-dip-on-cautious-outlook.html "Britain’s Next sees lower clothing inflation, shares dip on cautious outlook") as one of the indicators the central bank tracks.

In Japan, the Nikkei had earlier reported the government would nominate academic Ueda to the BOJ’s top job, sending the [yen surging as markets anticipated a possible earlier end to ultra-loose monetary policy](https://www.financedigest.com/yen-retreats-after-boj-policy-tweak-sparked-surge.html "Yen retreats after BOJ policy tweak sparked surge").

But in comments streamed online by Nippon TV, Ueda said the central [bank’s current easy monetary policy](https://www.financedigest.com/what-to-make-of-the-headlines-brexit-and-bank-of-england-policy-eba-bank-stress-tests.html "What to make of the headlines? Brexit and Bank of England policy, EBA bank stress tests") was appropriate and that it should continue, prompting some of the earlier yen strength to be reversed.

Japanese Prime Minister Fumio Kishida said the government is planning to present the [BOJ governor](https://www.financedigest.com/yen-trims-gains-as-possible-next-boj-governor-says-current-policy-appropriate.html "Yen trims gains as possible next BOJ governor says current policy appropriate") nominee to parliament on Tuesday, but did not answer a question on whether Ueda would be put forward.

It is truly up in the air if [major hawkish changes](https://www.financedigest.com/virtual-accounts-leading-payment-expert-calls-for-major-changes-in-wolfsberg-group-guidance-around-on-behalf-of-payments.html "Virtual Accounts: leading payment expert calls for major changes in Wolfsberg Group guidance around “On behalf of” payments") are coming to the BOJ,” said Juan Perez, director of trading at Monex USA in Washington. We are seeing the buck pulled in different, but the [yen is up on the potential for contractionary policy](https://www.financedigest.com/dollar-gains-against-yen-as-fed-policy-debt-ceiling-in-focus.html "Dollar gains against yen as Fed policy, debt ceiling in focus") action.

The [dollar sank as low](https://www.financedigest.com/dollar-falls-to-nine-month-low-as-powell-notes-progress-in-disinflation.html "Dollar falls to nine-month low as Powell notes progress in disinflation") as 129.8 yen, a one-week trough, and was last down 0.5% at 130.92 yen.

The [euro and sterling both fell more than 1% against the Japanese currency](https://www.financedigest.com/euro-having-a-laugh-a-quarter-of-brits-take-the-wrong-currency-on-holiday.html "Euro having a laugh: a quarter of Brits take the wrong currency on holiday") and were last down roughly 0.8% at 140.13 yen and 158.23 yen, respectively. The [Australian dollar](https://www.financedigest.com/asian-stocks-make-7-month-highs-australian-dollar-gains-on-hot-inflation.html "Asian stocks make 7-month highs, Australian dollar gains on hot inflation") fell 0.5% to 90.78 yen.

The BOJ shocked markets in December when it raised the cap on 10-year government [bond yields](https://www.financedigest.com/global-equities-gain-as-rising-bond-yields-pressure-gold.html "Global equities gain, as rising bond yields pressure gold") to 0.5% from 0.25%, doubling the band it would permit above or below its target of zero.

Since then, speculation has [gathered pace](https://www.financedigest.com/euro-zone-recovery-gathers-pace-allays-fears-of-recession-pmi.html "Euro zone recovery gathers pace, allays fears of recession-PMI") that the BOJ could adjust or scrap its yield curve control policy, even though it refrained from any changes at its last meeting.

BOJ deputy governor Masayoshi Amamiya had been the front-runner to replace incumbent governor Haruhiko Kuroda, but the Nikkei reported that he had declined the job.

James Malcolm, head of FX strategy at UBS, said Ueda’s prospective nomination should be perceived as a “hawkish” outcome, given Ueda’s previous criticism of the BOJ’s [monetary policy](https://www.financedigest.com/uks-ftse-100-dips-on-scope-of-tighter-monetary-policy-informa-jumps.html "UK’s FTSE 100 dips on scope of tighter monetary policy; Informa jumps") as far back as 2016.

“I’m surprised that dollar-yen is not at 129 already,” Malcolm said.

Maybe that’s just a [result of people](https://www.financedigest.com/uk-pm-sunak-election-results-show-people-want-us-to-deliver-for-them.html "UK PM Sunak: Election results show people want us to deliver for them") not knowing who these characters are. To me, this is as hawkish an outcome as having Mr. Yamaguchi in the governor role.”

Hirohide Yamaguchi, a former BOJ deputy governor, was also in the running for the [top job](https://www.financedigest.com/how-to-make-sure-not-overlooked-for-the-top-jobs.html "How to make sure you’re not overlooked for the top jobs") and has previously been a vocal critic of the BOJ’s stimulus programme.

The dollar index, which measures the greenback against the yen and five other currencies, was up 0.1% at 103.32. For the week, the index is on track for a 0.4% gain, which would be its [second straight positive week](https://www.financedigest.com/global-equity-funds-attract-inflows-for-second-week-in-a-row.html "Global equity funds attract inflows for second week in a row") and a run it has not had since October.

We are on the side of the buck [trending downward as the year](https://www.financedigest.com/three-waves-of-fintech-disruption-leading-trends-for-the-year-ahead.html "Three waves of Fintech disruption: Leading trends for the year ahead") progresses, but don’t forget the upswings and resistance as some chaos develops here and there,” said Monex’s Perez.

The pound was flat at $1.2112 after Britain managed to avoid a technical recession, with the [economy showing zero growth in the final three months](https://www.financedigest.com/uk-factories-suffer-worst-month-since-may-2020-as-economy-stumbles-pmi.html "UK factories suffer worst month since May 2020 as economy stumbles – PMI") of 2022.

The euro fell 0.4% to $1.0699 and was [set for a second straight week of losses](https://www.financedigest.com/dollar-set-for-weekly-loss-amid-expectations-fed-will-slow-hikes.html "Dollar set for weekly loss amid expectations Fed will slow hikes").

Meanwhile, the Norwegian crown strengthened against the euro, which dropped 0.8% to 10.8382 after Norway’s core [inflation rate jumped in January to its highest level on record](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc.html "UK shop price inflation hits record 8% in January: BRC").

========================================================

Currency bid prices at 10:21AM (1521 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 103.3100 103.2000 +0.13% -0.174% +103.5400 +102.8900

Euro/Dollar $1.0700 $1.0739 -0.36% -0.14% +$1.0753 +$1.0682

Dollar/Yen 131.1350 131.5300 -0.30% +0.02% +131.8650 +129.8000

Euro/Yen 140.32 141.27 -0.67% +0.01% +141.4900 +139.5700

Dollar/Swiss 0.9227 0.9221 +0.05% -0.23% +0.9245 +0.9200

Sterling/Dollar $1.2113 $1.2119 -0.04% +0.17% +$1.2138 +$1.2080

Dollar/Canadian 1.3348 1.3455 -0.79% -1.48% +1.3472 +1.3345

Aussie/Dollar $0.6942 $0.6937 +0.09% +1.86% +$0.6960 +$0.6911

Euro/Swiss 0.9871 0.9902 -0.31% -0.24% +0.9906 +0.9869

Euro/Sterling 0.8831 0.8860 -0.33% -0.15% +0.8872 +0.8824

NZ $0.6331 $0.6327 +0.06% -0.29% +$0.6346 +$0.6304

Dollar/Dollar

Dollar/Norway 10.0955 10.1765 -0.43% +3.25% +10.2150 +10.1130

Euro/Norway 10.8078 10.9283 -1.10% +2.99% +10.9540 +10.8095

Dollar/Sweden 10.4073 10.3427 +0.28% +0.00% +10.4565 +10.3043

Euro/Sweden 11.1371 11.1063 +0.28% -0.11% +11.1785 +11.0620

(Reporting by Samuel Indyk in [London and Gertrude Chavez-Dreyfuss in New York; Additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Mark Potter, Kirsten Donovan and Jonathan Oatis)](https://www.financedigest.com/new-york-holds-top-spot-london-second-in-z-yen-financial-centre-survey.html "New York holds top spot, London second in Z/Yen financial centre survey")


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