USDJPY Analysis: Strong Yen Rebound Sends Warning - Abe Nominations
Chief Cabinet Secretary Yoshihide Suga told reporters yesterday that the Japanese government will look to present Prime Minister, Shinzo Abe’s nominations for the next Bank of Japan governor to the respective parliamentary committees today.
PM Abe, will need opposition party support, as the ruling LDP (Liberal Democratic Party) do not have majority. Representatives from Japan’s primary opposition party have advised that they would back nominee Haruhiko Kuroda as the next Bank of Japan governor but they expressed concerns around the nomination of Kikuo Iwata, for the deputy position.
The Japanese yen has dropped around 9% since Shinzo Abe’s LDP party gained the December 16th victory with promises to end deflation and revive economic growth. The Japanese yen fell near a three year low, around USDJPY 94.77 two days ago, on heightened speculation that Kuroda could push for additional easing measures.
The subsequent strong yen gains, which were driven by concerns over the Italian political deadlock, are however a reminder of the challenges Prime Minister Shinzo Abe faces. Japan is often viewed as a so called “safe haven” in uncertain times as is the US dollar, which could potentially limit the longer term effectiveness of Japan’s monetary policy easing measures.
USDJPY – 27th February – Daily
USDJPY Analysis 27/2/13, Brad Styles