Yen slightly changed after Kuroda nomination for BoJ Governor
February 28, 2013 11:31 am in Forex Analysis
Economic news (28 February 2013) – The yen remained weak in early Thursday trading after Japanese Prime Minister Abe nominated Asian Development Bank President Haruhiko Kuroda for the post of BoJ governor.
The Japanese currency is on the way for a fifth consecutive month of decline, reaching its longest stretch since August 2008. The yen has fallen by 4.8% this year alone, thus becoming the worst currency performer.
At the time of writing, the yen was trading at $92.38 after experiencing a two-day decline, touching at $94.07 on 25 February, its weakest level since May 2010.
Prime Minister Abe’s choice of Haruhiko Kuroda was highly expected by market makers as Kuroda advocates for Abe’s monetary-easing plans and higher inflation. It is believed that Kuroda will easily receive approval to become the next BoJ governor.
Since taking the office in mid December 2012, Shinzo Abe has been very vocal about his strategy to weaken the yen, and that the BoJ should act in agreement with the government’s monetary policy.
Analysts expect a strong agreement to be formed between the BoJ and the Japanese government in order to revive the economy and stimulate growth in the world’s third largest economy. As weakening the national currency will be the focus of Japanese policy, analysts anticipate the yen’s value to remain low for the near- to mid-term.
At yesterday’s session the dollar was moving in the 91.05-92.35 range. This morning the currency pair was trading at 92.10-92.45.
Should the dollar successfully overcome resistance zone of 92.30-92.65, its aim will be reaching and testing the 93.00-93.20 zone. If successful, the upward trend will continue to 93.45-93.65. If the dollar falls below the support of 92.10-91.90, the next support zone is expected to be at 91.55-91.35 JPY. In case of a breakdown, the downward trend will continue to 91.10-90.80.
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