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13 Mar 2013
Forex Flash: Yen rebounds, but dollar more broadly might reverse - BTMU
Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that having hit an intra-day high of 96.71 in Asian trading yesterday, the Yen has rebounded somewhat, although the dollar is still higher than the lows recorded last Friday prior to the release of the stronger than expected payrolls report.
He sees that the rebound of the Yen was in part due to comments from politicians in Tokyo suggesting the BOJ nomination process will not necessarily go smoothly. There are a host of parties to consider in the process of voting for the nominated candidates but his view is that the comments from party officials indicating voting intentions do not suggest any of the three candidates will be rejected. Further, he adds that the Lower House vote for the three candidates will take place tomorrow while the Upper House vote will take place on Friday. Halpenny feels that it is in the Upper House, which is divided, where the risk of a rejection lies.
However, while the DPJ indicated it would reject Iwata, Your Party (12 seats), the largest party after the DPJ, LDP and New Komeito, has today signaled its support for Iwata. The Restoration Party (3 seats) has also today indicated support for Iwata taking the LDP to within a whisker of the required number of votes to ensure success for Iwata in the Upper House. Your Party and the Restoration Party will both reject Nakaso but with the DPJ supporting his nomination Nakaso is assured of the required support.
He sees that the rebound of the Yen was in part due to comments from politicians in Tokyo suggesting the BOJ nomination process will not necessarily go smoothly. There are a host of parties to consider in the process of voting for the nominated candidates but his view is that the comments from party officials indicating voting intentions do not suggest any of the three candidates will be rejected. Further, he adds that the Lower House vote for the three candidates will take place tomorrow while the Upper House vote will take place on Friday. Halpenny feels that it is in the Upper House, which is divided, where the risk of a rejection lies.
However, while the DPJ indicated it would reject Iwata, Your Party (12 seats), the largest party after the DPJ, LDP and New Komeito, has today signaled its support for Iwata. The Restoration Party (3 seats) has also today indicated support for Iwata taking the LDP to within a whisker of the required number of votes to ensure success for Iwata in the Upper House. Your Party and the Restoration Party will both reject Nakaso but with the DPJ supporting his nomination Nakaso is assured of the required support.