The yen on Friday strengthened on news that Kazuo Ueda was set to become the next Bank of Japan (BOJ) governor, but pared gains after he said the central bank’s monetary policy was appropriate.
The Nikkei had earlier reported the government would nominate academic Ueda to the BOJ’s top job, sending the yen surging across the board as markets anticipated a possible earlier end to ultra-loose monetary policy.
However, in comments streamed online by Nippon TV, Ueda said the central bank’s current easy monetary policy was appropriate and that it should continue, prompting some of the earlier yen strength to be reversed.
Photo: Reuters
The dollar sank as much as 1.2 percent to ￥129.8, but closed down 0.11 percent at ￥131.40.
The euro and sterling both fell more than 1 percent against the Japanese currency, but settled down at 0.73 percent (￥140.27) and 0.63 percent (￥158.42) respectively.
The New Taiwan dollar fell 0.23 percent against the yen to ￥4.3572.
The BOJ shocked markets in December last year when it raised the cap on 10-year government bond yields to 0.5 percent from 0.25 percent, doubling the band it would permit above or below its target of zero.
Since then, speculation has gathered pace that the BOJ could adjust or scrap its yield curve control policy, even though it refrained from any changes at its last meeting.
BOJ Deputy Governor Masayoshi Amamiya had been the front-runner to replace incumbent BOJ Governor Haruhiko Kuroda, but the Nikkei reported that he had declined the job.
“Markets had been expecting Amamiya to come in and pick up where Kuroda left off,” said Simon Harvey, head of foreign-exchange analysis at Monex Europe.
“The BOJ’s exit from ultra-easy monetary policy is still highly dependent on what happens during the spring wage negotiations, but a new regime could mean there’s no love lost on the ultra-loose policy side,” he added.
The US dollar index, which measures the greenback against six currencies including the yen, was up 0.35 percent at 103.58. For the week, the index gained 0.64 percent, its second straight positive week and a run it has not had since October last year.
The NT dollar on Friday fell 0.23 percent against the greenback, losing NT$0.068 to close at NT$30.136. Turnover totaled US$1.073 billion during the trading session. The NT dollar was down 0.48 percent from the previous week’s NT$29.990.
The pound fell 0.5 percent at US$1.2060 after the UK managed to avoid a technical recession, with the economy showing zero growth in the final three months of last year.
The euro fell 0.6 percent to US$1.0679, falling 1.11 percent from the previous week for a second straight week of losses.
Additional reporting by staff writer, with CNA
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