The USDJPY currency pair edged higher as the Japanese yen weakened against the US dollar. The yen’s weakness was unique as the dollar rose during the American session driving the yen lower. However, other major currencies, such as the euro and the British pound, were stronger than the dollar.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
Earlier today, Japan’s Prime Minister, Fumio Kishida, announced that a critical characteristic of the next Bank of Japan Governor is that the individual must be capable of coordinating the central bank’s activities with those of other leading central banks leading many to speculate that his preferred candidate would be former BoJ Deputy Governor Hiroshi Nakaso.
Top Broker Recommendation
- eToro Top stock trading platform with 0% commission – Read our Review
- Tickmill Regulated by the FCA – Read our Review
- Admirals (Admiral Markets) More than 4500 stocks & ETFs available – Read our Review
- Spreadex Spreadex has been around for a long time – Read our Review
- IG Top-tier regulation – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
Hiroshi Nakaso has significant experience working in international markets and has strong connections with other central banks. He also speaks fluent English, which the Prime Minister outlined as a critical requirement for the role of Governor.
Another hint that the Prime Minister might nominate Nakaso as the next BoJ Governor was his mention of the Lehman Brothers crisis that triggered the 2008 recession and financial crisis. Nakaso played a critical role in coordinating the efforts of global central bankers in the aftermath of the crisis and the ensuing recession.
The next Bank of Japan (BoJ) Governor will have a lot on his plate as inflation in the country is rising despite the current Governor, Haruhiko Kuroda, expressing confidence that inflation shall drop back to its 2% target within the first half of 2023.
It has become clear that the BoJ must change its ultra-loose monetary policies and start tightening them to prevent Japan from experiencing runaway inflation as the central bank continues hoping that the situation will resolve itself.
Japan’s consumer inflation rose to 4% in December, a 41-year high, and is projected to keep rising if the BoJ doesn’t intervene. The record inflation is fueled by the rising wage growth, which hit 4.8% and could keep rising.
The change of guard at the BoJ is being watched closely by investors globally as the next Governor’s policies will significantly influence the yen’s performance.
*This is not investment advice.
The USDJPY price chart.
The USDJPY currency pair was trading up 26.4 pips (0.20%) at writing as the yen weakened against the US dollar.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.