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JPY: Dovish shift in composition of BOJ board continues – Nomura

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 20, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Yujiro Goto, Research Analyst at Nomura, notes that yesterday the Japanese government has nominated an executive of Shinsei Bank, Ms Masai, as a new BOJ board member from July.

    Key Quotes

    “Current board member, Mr Ishida, who voted against the negative rate decision in January 2016 and QQE expansion in October 2014, is going to retire in June, and Ms Masai will take over the position after parliamentary approval. Her nomination was reported by local media (Nikkei) last month, but the government did not announce the nomination owing to a media leak. Thus, her nomination is unlikely to be a surprise to the market. Nonetheless, the composition of the BOJ board continues to be more dovish owing to this replacement.

    On 10 February, Ms Masai said the BOJ’s negative rate policy was the right decision, as without the move JPY could be much stronger. Her comments clearly show her strong concerns over the recent JPY appreciation and its impact on the economy. We think she is likely to vote for easing, when Governor Kuroda proposes easing going forward.

    The BOJ is very likely to downgrade its inflation forecast next week and the likelihood of a BOJ easing remains high. Expectations of a BOJ easing will support USD/JPY into the meeting next week, in our view.”
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