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15 Mar 2013
Forex Flash: BoJ leadership solidified – UBS
FXstreet.com (Barcelona) - Doubts were finally put to rest over the identity of the incoming BoJ leadership overnight. The Upper House of Japan's Diet confirmed all three government nominees - even Kikuo Iwata. The Lower House earlier gave their stamp of approval on Thursday. Having now secured confirmation from both houses, Kuroda, Iwata, and Kakaso are free to take up their new policy board positions on schedule on March 20th.
According to Research Analysts Gareth Berry and Geoffrey Yu at UBS, “There is one slight technical complication in that, strictly speaking, Kuroda has only been appointed to finish off the remainder of Governor Shirakawa's term (which would have ended on April 8th had he not resigned early). That means Kuroda is due to face a second vote within weeks before his own 5-year term can begin on April 9th, but we doubt a second vote will present a challenge for him.”
With another hurdle cleared, the focus will now shift to the possibility of an early policy meeting. The next scheduled meeting is on April 3-4, but there may be a temptation to impress the market by calling an additional unscheduled policy meeting ahead of time, to help get the wheels in motion as soon as possible.
According to Research Analysts Gareth Berry and Geoffrey Yu at UBS, “There is one slight technical complication in that, strictly speaking, Kuroda has only been appointed to finish off the remainder of Governor Shirakawa's term (which would have ended on April 8th had he not resigned early). That means Kuroda is due to face a second vote within weeks before his own 5-year term can begin on April 9th, but we doubt a second vote will present a challenge for him.”
With another hurdle cleared, the focus will now shift to the possibility of an early policy meeting. The next scheduled meeting is on April 3-4, but there may be a temptation to impress the market by calling an additional unscheduled policy meeting ahead of time, to help get the wheels in motion as soon as possible.