Yen Weakens Third Day as Abe Nominates Kuroda for BOJ Governor
The yen fell for a third day against the dollar as Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda to become Bank of Japan (8301) governor, raising the prospect of more stimulus this year.
Japan’s currency headed for a fifth monthly decline, the longest stretch since August 2008, as Abe also named economics professor Kikuo Iwata and BOJ official Hiroshi Nakaso as deputy governor candidates. The dollar was poised for a monthly gain versus most of its major peers before data forecast to show the U.S. economy expanded last quarter. The New Zealand dollar rose after an index showed business confidence increased.
“Prime Minister Abe has been very vocal on what he wants the BOJ to do and Kuroda will push for that easing to support growth,” said Janu Chan, an economist at St. George Bank Ltd. in Sydney. “That’s what’s behind the yen weakness of recent months. All those expectations are embedded in the yen now.”
The yen fell 0.2 percent to 92.38 per dollar at 8:32 a.m. in London extending this month’s decline to 0.7 percent. Japan’s currency dropped 0.2 percent to 121.35 per euro. The euro was little changed at $1.3137.
Kuroda said in a Feb. 11 interview that he favors additional stimulus this year and the central bank has “really substantial room for monetary easing.”
Japan’s currency has depreciated 11 percent versus the dollar since Abe’s Liberal Democratic Party won elections on Dec. 16 with a policy of increasing monetary stimulus to encourage growth.
The yen has fallen 4.7 percent this year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The euro gained 1.7 and the dollar rose 2.1 percent.
The New Zealand dollar strengthened 0.5 percent to 83.19 U.S. cents.