Forex Flash: BoJ future governor doubtlessly ultra dovish for 100.00 target on USD/JPY - Commerzbank

FXstreet.com (Barcelona) - Japan is getting ready for a change in the BoJ governor's seat, stepping down in April, and Commerzbank analysts observe that all aplicants continue to propose even more expansionary policies and that academia is encouraging them, pointing to Kikuo Iwata, a professor of the Gakushuin University in Tokyo, that has called for doubling the BoJ's securities purchases. "He believes that deflation can only be counteracted by a monetary expansion. That is what Prime Minister Shinzo Abe probably likes to hear", wrote analyst Lutz Karpowitz. "Markets, however, reacted mainly because Kikuo Iwata was temporarily confused with Kazumasa Iwata, a former BoJ vice governor", he added.

Abe is "doubtlessly" expected to appoint a governor who will pursue an ultra-loose monetary policy: "This expectation has been weighing on the yen for months now. So far, however, the decision-makers in Tokyo appear to be aiming for further depreciation", he continued, pointing to calls of USDJPY at 100.00. "For now, the challenge is to cross the 91 threshold for a longer time", Karpowitz concluded.