# Yen trims gains as possible next BOJ governor says current policy appropriate Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-02-10 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Yen strengthens as potential BOJ governor backs current Meta Description: Yen surges on news of Kazuo Ueda potentially taking over as BOJ governor, affirming central bank's stance on monetary policy. Learn more. URL: https://financedigest.com/yen-trims-gains-as-possible-next-boj-governor-says-current-policy-appropriatehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-02-10t091614z1lynxmpej190bxrtroptp4japan-yen-banknotes-1736814461181-compressed.jpg) By Samuel Indyk LONDON (Reuters) – The yen strengthened on Friday, before trimming some of its gains, after Kazuo Ueda, the figure reportedly tapped as the next Bank of Japan (BOJ) governor, said the central bank’s monetary policy was appropriate. The Nikkei had earlier reported the government would nominate academic Ueda to the BOJ’s top job, sending the yen surging across the board as markets anticipated a possible earlier end to ultra-loose monetary policy. 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. The [dollar earlier sunk as much as 1.2% to 129.8 yen](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles"). It was last down 0.5% to 130.90 yen. The [euro and sterling](https://www.financedigest.com/sterling-gains-vs-euro-after-sausage-war-ceasefire.html "Sterling gains vs euro after ‘sausage war’ ceasefire") both fell over 1% against the yen but were last down around 0.6% to 140.34 yen and 158.53 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") slipped 0.4%. 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") 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](https://www.financedigest.com/japanese-yen-gains-as-ueda-set-to-be-named-next-boj-governor.html "Japanese yen gains as Ueda set to be named next BOJ governor") Masayoshi Amamiya had been the front-runner for the governor role, but the Nikkei reported that he had declined the job. [“Markets had been expecting](https://www.financedigest.com/hydrolyzed-collagen-market-sales-is-expected-to-clock-high-growth-rate-by-forecast-2028.html "Hydrolyzed Collagen Market Sales Is Expected To Clock High Growth Rate By Forecast 2028") Amamiya to come in and pick-up where (current BOJ governor Haruhiko) Kuroda left off,” said Simon Harvey, head of FX analysis at Monex Europe. The [BOJ’s exit from ultra-easy monetary policy](https://www.financedigest.com/yen-retreats-after-boj-policy-tweak-sparked-surge.html "Yen retreats after BOJ policy tweak sparked surge") is still highly dependent on what happens during the spring wage negotiations, but a new regime could mean there’s no love lost on the ultra-loose policy side,” he added. The government is expected to present the nominees to parliament on Feb. 14. James Malcolm, head of FX strategy at UBS, said Ueda’s 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 it against six currencies including the yen, was last [little changed](https://www.financedigest.com/stocks-dollar-little-changed-as-inflation-data-sends-mixed-signals.html "Stocks, dollar little changed as inflation data sends mixed signals") at 103.17. For the week, the index is on track for a 0.2% 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. The pound was flat at $1.2118 after Britain managed to [avoid a technical recession](https://www.financedigest.com/uk-to-avoid-recession-this-year-but-outlook-still-weak-bcc-says.html "UK to avoid recession this year but outlook still weak, BCC says"), with the economy showing zero growth in the final three months of 2022. The euro was down 0.1% at $1.0726 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 krone strengthened against both the euro and [dollar after Norway’s core inflation](https://www.financedigest.com/stocks-and-gold-cheer-u-s-inflation-picture-while-dollar-slides.html "Stocks and gold cheer U.S. inflation picture, while dollar slides") rate jumped in January to its highest level on record. Both Norway and Sweden are in a pretty similar boat, struggling to get domestic [inflation pressures](https://www.financedigest.com/analysis-china-central-bank-under-pressure-to-ease-is-hemmed-in-by-inflation-fed-jitters.html "Analysis-China central bank, under pressure to ease, is hemmed-in by inflation, Fed jitters") under wraps,” Monex Europe’s Harvey said. That’s going to force them to [hike rates](https://www.financedigest.com/sp-warns-of-possible-economic-blow-hit-to-japan-inc-from-boj-rate-hike.html "S&P warns of possible economic blow, hit to Japan Inc from BOJ rate hike"), most likely more than they’re comfortable with, and that’s now playing out in the currency markets. On Thursday, Sweden’s central [bank raised its key interest rate by half a percentage point to 3% and forecast further tightening in the coming months to combat inflation](https://www.financedigest.com/boes-bailey-says-rate-setters-can-put-inflation-before-bank-worries.html "BoE’s Bailey says rate-setters can put inflation before bank worries") and headwinds from a weak currency. [(Reporting by Samuel Indyk and Harry](https://www.financedigest.com/britains-prince-harry-arrives-at-balmoral-itv-reporter.html "Britain’s Prince Harry arrives at Balmoral – ITV reporter") Robertson in London, Ankur Banerjee in Singapore; Editing by Robert Birsel and Mark Potter) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---