Yen Strong with New BOJ Governor Speculation

The Japanese Yen’s weakness has been in the spotlight since the summer of 2012. Recently, BOJ decisions to increase stimulus and to raise the inflation target to 2% have resulted in an even weaker Yen.

As of today, the Yen has hit two week highs against the EURJPY and one week highs against the USDJPY.

Prospect for New BOJ Governor
Information concerning the new BOJ governor was shared with Reuters. They were told that Toshiro Muto, former financial bureaucrat is the frontrunner to be the next BOJ governor.

Muto is perceived a someone who will not be as radical in his stimulus efforts. Much of the weakness of the Yen lies in the forecast of continual monetary easing.

“Reports that Muto is the favoured candidate to take over as Bank of Japan governor is the main reason for the yen’s recovery,” said Arne Lohmann Rasmussen, who is the head of Forex research at Danske Bank in Copenhagen.

If reports of Muto have brought some recovery to the Yen recently, how much more recovery would the Yen see if Muto took office?

I think the Yen will continue to be weak, but the new BOJ officials will have a lot of influence when it comes to the value of the Yen.

Do you think the new BOJ governor (whoever it would be) has enough influence to stop the Yen weakness altogether?

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