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BoJ Governor Nomination Due

JGBS

JGB futures firmed overnight, extending the bounce from the post-Tokyo session base observed at the backend of last week, with participants seemingly of the view that the touted (and surprise) nomination of Kazuo Ueda to succeed outgoing BoJ Governor Kuroda is more of a centrist appointment than an outright hawkish step.

  • The likelihood of the removal of the purest continuation candidate, Amamiya, from the BoJ board, was initially seen as a hawkish step, although that view has been tempered a little, given the fact that some degree of BoJ policy normalisation was always set to happen in the period ahead, no matter whom the government nominated to succeed outgoing Governor Kuroda. While many believe that the government will have tapped Ueda to provide a middle ground in the policy debate, as opposed to an outright hawkish or dovish leaning.
  • The government will unveil its preferred candidate for the post at 11:00 Tokyo (02:00 London).
  • Elsewhere, the BoJ will provide 5-Year loans to banks for via its pooled collateral channel as it looks to backstop its YCC mechanism (this operation was announced at the tail end of last week).
  • Preliminary Q4 GDP headlines the domestic economic docket, with final industrial production prints for December also slated.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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