Forex Flash: BoJ incumbents suggest more JGB investment - Nomura

Nomura Strategist Yujiro Goto notes that BOJ deputy governor candidates, Mr. Iwata and Mr. Nakaso, have given speeches in parliament today.

Mr. Iwata‟s stance was clearly more dovish than the current BOJ leader as expected, while Mr. Nakaso was less dovish than Mr. Iwata. In this regard, Goto feels that there were little surprises from their speeches. However, he notes that Mr. Iwata clearly mentioned that the BOJ law needs to be revised, while Mr. Kuroda yesterday refused to provide his view on the BOJ law change because it should be decided by lawmakers. He writes, “Mr. Iwata also said he should take responsibility if the Bank is unable to meet its inflation target in two years and the best way to take responsibility is to resign, suggesting he may step down if the Bank fails to achieve its target.” He feels that this is a stronger commitment than Mr. Kuroda and Mr. Nakaso and it has become clearer that Mr. Iwata will be the most dovish board member if he is nominated.