“Who is Kazuo Ueda?”
(Bloomberg) — “Who is Kazuo Ueda?”
That’s the question pinging around investors from Singapore to London after news broke Friday that the economist and former Bank of Japan policy board member may be picked as its next governor — a candidate virtually no one saw coming.
“Ueda? More like Who-eda?” said Calvin Yeoh, portfolio manager at hedge fund Blue Edge Advisors Pte in Singapore. “It was like Christmas in Tokyo the way my chats lit up” as market participants unfamiliar with the ins and outs of BOJ history rushed to figure out who he was.
Yeoh is one of many investors attempting to gauge Ueda after Nikkei reported Masayoshi Amamiya — the current deputy and leading contender to replace Haruhiko Kuroda — refused to take the post. With markets already anticipating how Amamiya’s tenure could rip across assets, news of Ueda’s potential appointment blindsided traders.
The yen surged more than 1% against the dollar in the wake of the news, while Nikkei futures erased gains and Japanese government bond futures headed lower.
“The response from folks around here is — who is this guy? He wasn’t on anyone’s shortlist that I know of,” said Ilya Spivak, head of global macro at researcher tastylive in San Francisco. “People will be spending all weekend reading up on his previous comments and work.”
Likely BOJ Nominee Ueda’s Policy Thoughts in His Own Words
Ueda, 71, a professor at Kyoritsu Women’s University, was a BOJ board member from 1998-2005 when the central bank introduced a zero interest rate policy for the first time and embarked on quantitative easing.
In comments from a column he wrote in the Nikkei newspaper in July, he’s flagged that the path toward achieving sustainable 2% inflation in Japan was a “long one,” while also suggesting there needed to be a “serious look” into the future of monetary easing “at some point.”
Simon Harvey’s phone was ringing hot early Friday morning in London as investors called to get his views on Ueda.
“A lot of people were scrambling around to say, ‘okay, unless you’ve been in the market for the last 20 years, you weren’t necessarily familiar with the name,” said the head of currency analysis at Monex Europe. He’ll likely be spending his weekend researching Ueda to map out his next policy moves.
Surprise BOJ Pick to Send Yen Up, Stocks Down, Strategists Say
For Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo, her first reactions were surprise and suspicion. While she knew who Ueda was, she found his potential nomination strange, as he had not been seen as a candidate, but she recognized the impact it would have on markets.
“I am not sure how much I can trust this report, but since Ueda was not on the list at all, the yen is appreciating and stock prices are likely to fall given the impression of potential tightening,” she said in a phone interview. “However, we don’t know the sources of the news, and we don’t want to follow the news too closely.”
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