What does matter to analysts at Commerzbank is how insistence to stick to the ultra-expansionary monetary policy is seen within the BoJ and the government. That is set to determine the path of the Yen.

Kuroda’s imminent retirement

“The BoJ might be correct in assuming that high inflation levels are a temporary phenomenon and that inflation rates will ease below the BoJ’s target very soon. However, it seems to become increasingly clear that the government wants to end this consensus.”

“Kishida’s intention to discuss this consensus with Kuroda’s successor makes the question of who will become Kuroda’s successor all the more important. If it will be someone who so far gave the impression of favouring Kuroda’s policy that will be JPY negative, if it is going to be someone who criticises Kuroda’s policy, further significant JPY appreciation is possible.”