Yen Plunges As Uber-Dove Kuroda Set To Head Bank Of Japan

Tyler Durden's picture

In our prediction two weeks ago of who the next Bank of Japan governor was likely to be, we said that "the tussle lies between a slightly less dovish bureaucrat in Toshiro Muto (favored by the opposition) and a banker, Haruhiko Kuroda, who is a front-runner in Abe's camp.... we suspect Abe will err on the side of uber-dovish to fight the currency wars alongside him." Sure enough, the uber-dove Kuroda, not to be confused with the Yankees pitcher, is now set to become BOJ governor.

From Reuters, "Japan's government is likely to nominate Asian Development Bank President Haruhiko Kuroda, who has called for pumping more money into the economy, as its next central bank governor, the Nikkei newspaper reported on Monday. Kuroda, formerly Japan's top currency diplomat, has already been offered the post unofficially by the government, which plans to submit its nominees for three BOJ leadership posts to parliament this week, the paper said. Kikuo Iwata, an academic known as one of the most vocal advocates of aggressive monetary expansion, is likely to be nominated as deputy BOJ governor, the Nikkei said without citing sources."

The other deputy BOJ governor post will probably be filled by a central banker, most likely BOJ Executive Director Hiroshi Nakaso, who now oversees the central bank's international operations, the paper said. Kuroda, 68, has been considered a strong candidate to replace current BOJ Governor Masaaki Shirakawa, whose term ends on March 19, because of his extensive experience at the Finance Ministry and in international policy. He has long called on the BOJ to set an inflation target and pump more money into the economy through purchases of government bonds and risky assets.

And just as expected, Mrs. Watanabe is replaying the old news once more, even though it has been extensively priced in by most, and the Yen is once again re-re-re-plunging on the non-news.

And just as sure - the price of LNG in Japan is about to go uber ballistic as the cost of imported energy hits fresh daily records.

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tickhound's picture

LOL Currency wars fought just like freaking Gallipoli 100 years ago.

The solution to the shower of machine-gun fire is to send MORE TROOPS INTO THE FRAY!

Stop as soon as everyone is dead...

Some new "founders" need to find a way to Blitzkrieg our way AROUND this.  Crash the system and conquer France in two weeks.

holdbuysell's picture

Recycling expensive LNG into cheap exports, losing $5 on each export.

At least they have a chance to make it up on volume. /s

francis_sawyer's picture

I can't wait until I can get Asahi "Super Dry" for the price of PBR...

francis_sawyer's picture

Natty Boh... from the rand of PRESENT RIVING

GMadScientist's picture

That and Sapporo...worst hangovers I've ever had...I'd rather drink six Long Island teas.

Jason T's picture

Japs may well be buyers of US stocks.. :/  

e_goldstein's picture

Q: What do the Yankees and central bankers have in common?

A: They both suck.

GMadScientist's picture

Both owned by Chase and the rest of the criminal cartel.

jeff314's picture

Bukkake for japan people!

buzzsaw99's picture

And because of this everyone here expects Japanese rates to rise just like they expect them to do in the USA. [/uber sarc.] LMAO to infinity.

joego1's picture

Blow up your money

Throw away your paper

Eat a lot of peaches

And try to find Jesus

On your own.


John Pryne??

orez65's picture

We have to get over this hyperinflation fear. It will "clear the air".

It happens regularly in Latin American countries.

And they go on.

It won't be the end of the world.

All yen (dollar) denominated assets will get wiped out.

All hard assets will still be there. Just different people will own them.

Pensioners will eat cat food for a while, some will kill themselves.

There will be riots.

A right wing dictatorship will take over the US government.

And is it all worth it?

Just so that Americans didn't have to bother learning what money is?

Just because it was easier to believe than to challenge their leaders lies?

Just because it was easy to believe in Keynes "alchemy", "... Money for nothing and chicks for free ... "

Just so that they elected a President that promised to close Guantanamo and instead made the US a bigger Guantanamo by signing the Military Defense Authorization Act.

Just so that the "exceptional" Americans could get "their" entitlements, like free cell phones.

Fuck you ass holes!

css1971's picture

And gold in Yen? For the rest of the world which doesn't operate in dollars, this is what gold is for.

FWIW you can see that here.

Smegley Wanxalot's picture

Look at the bright side: this means we can pick up used Gobots on the cheap now, plus discount lifelike love dolls!

Spigot's picture

Hull breach imminent. My friends, this is the beginning of a very difficult time. Pls do not under-estimate the effects this will have on global finance. The Japanese have pulled the trigger. They are committed and will do what they feel is best for them, as they have been doing what was best for everyone else and it hasn't worked for them. Japan will hyperinflate which will give everyone else an excuse to do the same. Bonds will implode. Derivatives will flash fry. The entire finanical system will be replaced by a smoking crater. THIS IS IT.

Orly's picture

"No, no!  Don't!"

"Why, what?"

"He said he's gonna jump!"

"Gonna jump?  How long's he been up there?"

"Four days."




Seriously?  THIS IS IT?

Wow, man.  Get a grip, k?

steve from virginia's picture



First of all, the currency market will set a price on the yen, there is little the BoJ can do to effect the much larger currency market. What the Japanese can do is try to peg the yen to another currency and buy/sell yen to maintain the peg. This is no panacea as pegs leave countries vulnerable to speculative currency attacks ... what passes for 'bond market vigilantes' in 2013.


Japan wishes to regain a current account surplus during a period when its customers have reduced means. How are a couple of goofy career bureaucrats that nobody has ever heard of going to convince Americans on food stamps to buy Japanese products ... when Chinese and other S. Asian varieties are cheaper? That is what the Japanese are tasked with accomplishing ... good luck with that.


Regardless of what Japan does and how cheap it's so-called 'products' are, its overseas customers are broke and unable to spend .. the reason why Japan's surplus became a deficit in the first place.


Whatever Japan gains by exports it loses by imports ... primarily more expensive fuel. What's underway in Japan is a variation on what has taken place in Greece: neither country can afford to borrow in order to import fuel: conservation by other means = the bankruptcy of Japan.



Orly's picture

The market will set the yen rate.  That's right.  It has been amazing to watch all these months as some guy's name is mentioned or an inflation target specified and the yen traders sell off yen like it's going out of style.

I've been waiting patiently and I may have just got my break...for a retracement of this silliness.

No one can step up to a podium, whip out an old stick, wave it in the air and say, "Wingardium Leviosa," and have the market do what they say...even if that's not Japanese.  It just doesn't work that way.

Yen Cross's picture

 Hi stranger. The yen looks ready to punch up through 98. Those two weekly candles(August of 09) look good. Get ready for the short squeeze in Sterling.  :-D

Orly's picture

August of 2009?

Sterling's got a ways to go yet.  1.42?

AUDUSD is the scary one.  It needs to hold this wedge or it will zoom to the downside.

Yen Cross's picture

 Last weekly charts (U/J) when you look back to current levels were 2009. (May 2010 high was  94.82) Sterling is due to rise. GB is not an export exonomy, and inflation will force the Gov. to reel in Inflation, while looking for more proactive ways to increase exports. The bad news is in and over discounted. The $ is way over bought!

Orly's picture

Yes, I saw the bull trap formation on the Dollar Index.

There is also an Adam and Eve bottom formed on the EURUSD H4, so the gains (DXY retrace...) may come from there.  I am not sure about the CHieF, as I haven't followed it but a quick glance at the Weekly chart says it might make .95.

There may be a short-term bounce in Cable but remember that Carney is going to come in and gobble up everything, same as he did in Canadia.  So, look for the ponzi Euro and the Swissie to carry the load off the DXY.

There's lots of reason why the bad news is not over for the UK; the main one being that most of their exports go to the Continent and no one is buying, no matter how cheap they get.


Yen Cross's picture

   I was going to mention GB's exports. Doesn't matter. As long as the M.E.(cl$'s) and E.M.'s stay hot they will rinse flows through Sterling. The bad news is in. The $ is too overbought and there needs to be some other release points.


   If you look at flows, they have reversed in February, back into Asia. The aussie dollar and yen to some degree took some pressure off. ACB's selling against them. Now the BoJ has a dove, and China is tightening. (reverse repos pulled). I like your Adam & Eve scenario (cute) You know how to spot price action, albiet an unusual definition. :-)

   You are doing well Orly. I'm looking into something else. She has a veil of purple. SHIT! Australian "Fire Dragon"

StychoKiller's picture

Hmm, the Japanese should start selling Gundams...

robertocarlos's picture

The Japanese have been buying all our finest cuts of meat. Let's see how they like bologna.

besnook's picture

the new improved pearl harbor. just what is the plan? japan's biggest trade partner is china. the yuan is tied to the dollar. the usa is significant because of the large current account advantage. japan will obviously have to pay more for energy but how much of that will be balanced by a much stronger dollar? which will rally if any one else follows japan's lead? don't you have to assume abe has talked to someone about the way they see this plan working out? that kuroda knows the plan and is on board with it? that there are contingencies in place or planned if the virus escapes the lab? or is that the plan? what did abe and obama talk about? is this plan in conjunction with the fed? to start an asian currency crisis that will smoke out the yuan/dollar peg? or was he warned or told this means war, a day that will live in infamy? do they plan on unleashing the quadrillion yen a-bomb? to solidify a devalued yen?

i am not an fx guy so i would appreciate some light on my perceptions. my personal feelings are that japan has lit out on it's own with a strategy they feel is right for japan in a sort of preemptive move that they feel was necessary on an environment where the first mover wins by suffering less as the leader of the pack.

shinobi-7's picture

What we see in the data is not "armageddon" yet but a huge increase of the income gap. Those working for Toyota and related will do well, for the rest it is back to the Oshin days. But no revolution will ensue. You need starvation for that, not misery.

donpaulo's picture

never underestimate the ability of the Japanese public to endure whatever measures the government imposes on them.

hooligan2009's picture

japan owns a large chunk of treasuries...but then it would..being a colony of the US..the race to debase means that it will also own many many more companies in the US..after all it can just print yen, sell it whatever, and secure the free cash flow from what remains as productive assets amongst the debris of socialism sponsored pregnant crack ho's. 

the race to debase will continue along the lines of..."I am the Fed and I can print money to the banks to ramp up share purchases for the world's free cash flow producing assets" and "I am the ECB I can print money for french, italian and german banks to but productive assets anywhere in the world".

slight problem...the free cash flow rate is diminishing closer to the inflation rate..and when food prices start jumping up to above 230 on the world food price index...people can either eat or pay off debt...governments can either pay off interest or fund EBT..not both..

anyway..the world's biggest "poseurs" are providing the nicest night out for the world's biggest sycophants..can't quite work up the energy to turn off the history channel and pull some toe nails out by the root i can watch the nice people spend more in one night on feeding at the trough than some impoverished countries spend in a year on food. bleh!

hooligan2009's picture

oh..and an FYI...the BoJ has no discretion to act on its own in the fx takes instructions from the Government (MoF).

Yen Cross's picture

  The bottom is not in. It will be a 38.2% retrace off the original move. Orly is right. The move lower will be deeper.

   I'm cutting my losses I'n N.Y. pump and dump! ( I'm Lying)

      It's like aluminum poles during a windstorm on Lake Erie orly.


    You lost in translation/ Downgraded English  (hounds) actually think the yanks will give up our fire arms? Hold yer worthless heads up! > Pumpkin contest