JPY Rose Following Recommendation from Reiwa Rincho

Must Read

The Japanese Yen (JPY) briefly rose last week following an independent group of policy advisors calling to change the monetary policy of the Bank of Japan (BOJ). The recommendation was to make its 2 per cent inflation target a long-term goal instead of hastening to reach it.

Hirofumi Hasebe, NQN staff writer for Nikkei Asia, reported that the recommendation allowed the JPY to rise to 129.20 yen to the dollar, a full yen stronger. The staff writer also said that Nobuyuki Hirano, former CEO of Mitsubishi UFJ Financial Group and Reiwa Rincho panel member, stated that the BOJ needs to be more flexible.

Hasebe added, “Hirano did not mince words when it came to the impact of the BOJ’s unprecedented level of buying Japanese government bonds in an attempt to force interest rates down, which has crowded out normal trading.”

Reiwa Rincho, formerly known as Reinventing Infrastructure of Wisdom and Action, comprises industry and academic experts and is supported by 22 prefectural governors. The panel was created as a mechanism to resolve Japan’s structural problems.

Miyagi Governor Yoshihiro Murai, the panel’s group head, stated in a news conference, “We will launch a national movement with perspectives from regional areas in order to make progress in resolving issues that have been put off.”

The recommendation provided by Reiwa Rincho was that instead of hastening to meet the price stability target of 2 per cent at the earliest time, the BOJ should consider converting it to a long-term goal.

“These recommendations will serve as a trial balloon for how much the BOJ is willing to heed objections on monetary policy,” commented Shunsuke Kobayashi of Mizuho Securities. Toru Suehiro of Daiwa Securities also expressed his opinion that the JPY may have strengthened because the recommendation reflected Okinawa’s views.

In his report, Hasebe also expressed that panels like Reiwa Rincho significantly influence Japanese policies and hopes that recommendations like this will help strengthen the JPY.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img