The USDJPY currency pair has been trading sideways since Thursday. The US dollar lost some of its previous momentum, which has seen the currency pair rally higher since the start of February. The currency pair seems to be consolidating as investors await the confirmation of the Bank of Japan’s new leaders.
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The Japanese government nominated Kazuo Ueda, an academician, as the new BoJ Governor, hoping he would help keep prices closer to the bank’s target of 2.0%. Japan’s consumer inflation has recently increased, forcing the central bank to rethink its ultra-easy monetary policies.
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Still, Ueda has yet to take over his post as his appointment is yet to be ratified by the Japanese Parliament, which is just a formality at this stage. Japan’s cabinet chose Ueda, a well-known economics academic, due to his insights into the country’s monetary affairs.
The Japanese government had said it was seeking someone with global experience who could coordinate BoJ’s policies with other global central banks’ policies. The statement was probably about Kuroda’s refusal to adopt stricter monetary policies when other central banks did the same.
Shinichi Uchida, a current BoJ executive, and Ryozo Himino, a former banking regulator, will deputise Kazuo Ueda. The two deputy governors have significant experience setting monetary policy and have intimate knowledge of Japan’s financial affairs.
The Japanese government hopes that the team of three top officials will work together to detangle Japan’s intricate monetary policy structure that has been set on the ultra-loose path for many years to stimulate the growth of the country’s economy.
Many experts have opined that it will take special skills to detangle Japan’s monetary policy structures without plunging its economy and financial markets into disarray. A team made up of an academician, and seasoned policymakers may be just what is needed.
Geopolitical tensions between North Korea, South Korea, Japan and the United States over the weekend also dampened the mood in the currency markets as North Korea continues to threaten the region’s stability.
North Korea launched several missiles into the waters around Japan’s coast, triggering more joint drills between Japan and the United States.
*This is not investment advice.
The USDJPY price chart.
The USDJPY currency pair had been trading sideways for three days. Will it keep rising?
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