Forex Flash: Yen weakness persists as BOJ nominations moves closer – BTMU
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USD/JPY
FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that Yen has continued to weaken as the BoJ nominations draw ever closer.
He sees that Asian stock markets are flat to higher with the Shanghai Composite out-performing fuelled in part by the positive HSBC Manufacturing PMI reading which climbed from 51.5 to 52.3 in January. He notes that the official PMI fell slightly, but the new orders component was higher, helping confidence.
Elsewhere, Halpenny sees that Japanese equity markets are also higher with USDJPY above 92.00 for the first time since June 2010. Market participants may be concluding that the US employment report will be supportive for USDJPY later today while there is also some increased focus on the potential nominations for the three key BOJ posts.
He writes, "Economy Minister Amari revealed today that the list of names is narrowing. We may well start to get public comment on potential names over the coming week or two. We believe former Deputy Governor Toshiro Muto and the current ADB president Haruhiko Kuroda are strong candidates for the Governor position."
The LDP are likely to want to move away from the current unusual mix of having two BOJ officials (Shirakawa and Yamaguchi) and one academic (Nishimura) and revert back to one BOJ official, one MOF or ex-MOF official and one academic. If that's the case, both Muto and Kuroda would fit the bill being ex-MOF officials. For yen bears, Kuroda would probably be the favoured choice - he has been more vocal about aggressive easing while Muto would probably be perceived by the markets as a little more balanced and conservative. Kuroda also fits the remit given his strong ability to communicate with the international markets - something the LDP has stated is important."
However, Halpenny finishes by noting that some Diet members have expressed concern over Japan loosing influence at the ADB if Kurda was to depart early from his current role, meaning that Muto could get more Diet support and just pip Kuroda to the post. He adds, "Comments from Your party officials should be watched closely next week as they hold 12 seats in the Upper House and would be key in getting the LDP close to the required majority in an approval vote in the Upper House."
He sees that Asian stock markets are flat to higher with the Shanghai Composite out-performing fuelled in part by the positive HSBC Manufacturing PMI reading which climbed from 51.5 to 52.3 in January. He notes that the official PMI fell slightly, but the new orders component was higher, helping confidence.
Elsewhere, Halpenny sees that Japanese equity markets are also higher with USDJPY above 92.00 for the first time since June 2010. Market participants may be concluding that the US employment report will be supportive for USDJPY later today while there is also some increased focus on the potential nominations for the three key BOJ posts.
He writes, "Economy Minister Amari revealed today that the list of names is narrowing. We may well start to get public comment on potential names over the coming week or two. We believe former Deputy Governor Toshiro Muto and the current ADB president Haruhiko Kuroda are strong candidates for the Governor position."
The LDP are likely to want to move away from the current unusual mix of having two BOJ officials (Shirakawa and Yamaguchi) and one academic (Nishimura) and revert back to one BOJ official, one MOF or ex-MOF official and one academic. If that's the case, both Muto and Kuroda would fit the bill being ex-MOF officials. For yen bears, Kuroda would probably be the favoured choice - he has been more vocal about aggressive easing while Muto would probably be perceived by the markets as a little more balanced and conservative. Kuroda also fits the remit given his strong ability to communicate with the international markets - something the LDP has stated is important."
However, Halpenny finishes by noting that some Diet members have expressed concern over Japan loosing influence at the ADB if Kurda was to depart early from his current role, meaning that Muto could get more Diet support and just pip Kuroda to the post. He adds, "Comments from Your party officials should be watched closely next week as they hold 12 seats in the Upper House and would be key in getting the LDP close to the required majority in an approval vote in the Upper House."
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