BoJ Board Nominations Made Official

There wasn’t any meaningful market reaction to the Japanese government’s formal nominations for the BoJ’s leadership positions in the post-Kuroda era, given that the names (Ueda, Himino & Uchida) were telegraphed in Friday’s Nikkei article. JGB futures saw a modest extension through their morning high and print +20 into the close. Cash JGBs are little changed to 3bp richer across the curve, a touch shy of best levels with a similar dynamic seen in swaps.

• As flagged earlier, this leadership mix is generally seen as more of a centrist platform, as opposed to an outright hawkish or dovish setup, with many suggesting such appointments will cement expectations for a gradual normalisation of monetary policy. Still, we note that the most recent insight piece from our policy team fleshed out their understanding the Ueda will “likely keep interest rates at low levels but may quicken the scrapping of yield curve control to restore functioning in financial markets.”
• Locally, prelim Q4 GDP data was softer than expected, with inventories the major headwind for the headline print.
• Looking ahead, the latest round of BoJ Rinban operations headline on Wednesday.