Japan’s Nikkei reported prior to market open that a current Bank of Japan Deputy Governor, Masayoshi Amamiya, had been sounded out by the government to take on the role as next Governor once Kuroda departs on April 8. The Nikkei cited multiple, unnamed, sources for the information.

USD/JPY gapped higher in very, very early Asian Monday trade. As is always the case in the early hours of Asia market liquidity is very poor. New Zealand is normally the first FX centre to open, but markets there were closed for a holiday. Which left Australia’s east coast as the next centre to open. In such illiquid markets fresh news hitting can see spreads blow-out and moves extend. Such was the case this morning with USD/JPY jumping rapidly towards 132.50 before running out of buys outnumbering sells. After some choppy trading near (what turned out to be) these highs USD/JPY began to head back down to cover its gap. The down move was egged on by Japan’s finance minister Suzuki saying he hadn’t heard anything on nominations for Bank of Japan Governor yet. This seems hard to believe but Suzuki added he had been out of the loop on the issue. I’m not sure a finance minister should be out of such a loop but that’s what he said. Further, Amamiya refused to comment on the news when he was asked. USD/JPY continued to subside.

The gap was not entirely covered, bids held circa 131.50 and USD/JPY has since traded back onto the 132 big figure. Japan’s deputy chief cabinet secretary Isozaki then weighed in, saying there was no truth to reports BOJ deputy gov Amamiya had been sounded out as next BOJ governor. USD/JPY is currently back under 132.00 as I update.

AUD/USD and NZD/USD were in the crossfire, these gapped a little lower and have both subsequently filled in these gaps. It’s a similar story for GBP/USD and EUR/USD.

Oil has stabilised during the session, with some supportive weekend news and comments (see bullets above).

In non-market news there has been a massive, magnitude 7.8, earthquake in southern central Turkey, near the border with Syria. Extensive damage and fatalities have been reported in both countries and this news is likely to worsen. Calls for international aid have been made.

Asian equity markets:

  • Japan’s Nikkei 225 +0.9% (liking the Amamiya continuity chatter)

  • China’s Shanghai Composite -1% (lead from Friday Wall Street but also hit on the balloon shoot-down news)

  • Hong Kong’s Hang Seng -2.3% (ditto)

  • South Korea’s KOSPI -0.9%

  • Australia’s S&P/ASX 200 -0.2%

usdyen gap 06 February 2023 monday