We've been tracking this for months now as it moved through various stages.

First there were rumours, then denials, then confirmations and then Kishida himself confirmed it in a radio interview:

Over the weekend Kishida said the same thing again:

  • "Under the new BOJ governor, we must discuss the relationship between the government and the BOJ,"

Bank of Japan Governor Kuroda's term finishes up on April 8. Kishida himself has the final say on who the new governor will be.

A new agreement between Japan's government and the Bank of Japan would pave the way for a dilution of the current ultra-easy BOJ and would be supportive of the yen at the margin . As this news has progressed through various stages its already been yen supportive. I'd suggest if you think its fully 'priced in' you may be a little premature. A reduction of easy policy by the BOJ will bring more yen back into the country and into JGBs.

kishida 08 July 2022