THE SETTING YEN
The inflation-oriented Abenomics is marching on as the yen slips the third day in a row in the wake of nomination of Asian Development Bank President Haruhiko Kuroda to be the next Bank of Japan governor and two other Abe's protégés as deputy governor candidates. Japanese currency was set for a fifth-straight monthly drop, the longest stretch since August 2008. The yen has fallen 9.6 percent since Shinzo Abe's Liberal Democratic Party December 16 victory in general elections, and reached 94.77 per dollar on February 25, its weakest since May 2010. Among the currencies of ten developed nations tracked by Bloomberg Correlation-Weighted Indexes, it's dropped 4.8 percent this year, thus being the worst performer after the pound. This morning it lost 0.2 percent to 92.41 per dollar as of 6:47 a.m. in London after declining about 0.5 percent in the past two days. It dropped 0.3 percent to 121.47 per euro, extending losses into a third day. At the time of writing USD/JPY is trading at 92.1906 and EUR/JPY at 120.859.
Abe has already successfully pushed for changes at the central bank, which last month doubled its inflation target to 2 percent and agreed to an open-ended asset buying program from 2014, and the new leadership team is expected to push for even more aggressive action.
Japan's economy has contracted for the past three quarters, but there have been some signs of life in recent data, including consecutive rises in factory output and signs of a pick-up in the export engine.