A stronger yen is justified if the new BoJ governor proposes a monetary policy reversal – Commerzbank

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Yen losses after yesterday’s Bank of Japan meeting did not last long. As reported by Commerzbank economists, Yen investors are likely to focus on the successor to current BoJ Governor Haruhiko Kuroda.

The yen is torn between hope and presentiment

“The yen is defending the gains it made after the December meeting and continues to trade 6% stronger against the dollar. I can’t imagine this is solely due to the effect of the 0.25% rise in long-term interest rates . On the contrary, there is still a risk that the BoJ will apply a less easy monetary policy in the future.”

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“Reportedly, a series of possible successors will be presented to Parliament on February 10, and the following week a first hearing of the candidates will be held. Yen investors are likely to focus on that next, to get a better idea of ​​whether any hope of a monetary policy reversal (and thus a stronger yen) It’s justified or not.”

Source: Fx Street

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