JPY: Dovish Shift in Composition of BOJ Board Continues – Nomura
JPY: Dovish Shift in Composition of BOJ Board Continues – Nomura
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.”
