The yen found a fresh excuse to fall: BOJ governor Masaaki Shirakawa will leave his post 2 weeks before his planned retirement: March 19th instead of April 2nd. The new governor will probably align the policy of the central bank in a better manner with the desire of the government: will act in a more determined manner to fight deflation and weaken the yen on the way.
USD/JPY broke to higher ground, reaching 93.52 before consolidating the gains. Some support awaits at the peak seen last week: 92.88. It is followed by 92.12 and 91.20.
On the upside, 93.77 is the next hurdle, before the all important 94.70 that guards 95. For more, see the USD/JPY forecast.
Shirakawa did comply with some of the new government’s requests, and expanded the QE program. In addition, the BOJ set an inflation target of 2%, as expected from the government. But, the BOJ’s forecasts see very low inflation in 2013 and 2014.
Together with Shirakawa, two other board members will leave. It is important to note that also the upper house of the Japanese parliament has a say on the appointment of the BOJ governor, and PM Shizo Abe does not command a majority there.
