Japanese yen jumps on report Kazuo Ueda will be next governor of the central bank

The Japanese yen pushed higher against both the euro and U.S. dollar after a Nikkei report said Kazuo Ueda would be the next Bank of Japan governor.

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Feb 11, 2023 - 02:46 Updated: Feb 11, 2023 - 02:53
Japanese yen jumps on report Kazuo Ueda will be next governor of the central bank

The Japanese yen pushed higher against both the euro and U.S. dollar  on Friday after a Nikkei report said Kazuo Ueda would be appointed as the Bank of Japan’s next governor.

Economist Ueda is a former member of the central bank’s policy board.

The yen strengthened against the dollar from above 131 to 130.28 immediately after the publication of the report, around a one-week high. It tempered gains to around 130.9 in the following hours, as analysts said it was unclear exactly what Ueda’s appointment would mean for monetary policy.

The Bank of Japan told CNBC its governor and deputy governor appointments were made by the Japanese Cabinet to be approved by its parliamentarians and would not comment further.

Ueda would replace Haruhiko Kuroda, whose term started on March 20, 2013, and will end on April 8, 2023. Kuroda has overseen the BOJ’s policy of maintaining its ultra-low interest rates while other major central banks have been hiking to tackle inflation.

The yen fell to more than 20-year lows against the U.S. dollar in 2022 on interest rate differentials and as investors flocked to the safe haven of the dollar due to market volatility.

Though a weaker yen is generally seen as a benefit to Japanese policymakers as they try to stimulate inflation, the extent of the depreciation and price pressures on consumers have forced several interventions to shore up the currency.

Kuroda has defended the BOJ’s yield curve control policy, which keeps its tolerance range for the yield in a tight range. The BOJ jolted global markets in December when it widened the yield on the 10-year Japanese government bond to move 50 basis points either side of its 0% target, up from 25 basis points.

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