Japanese markets reacted with shock on Friday to news that the government had picked academic Kazuo Ueda to be the next central bank governor, but investors quickly snapped up the yen and sold bonds on expectations he will end years of ultraeasy monetary policy.
Whether, when and how the Bank of Japan adjusts its policy stance is one of the major questions facing markets globally this year, and, in a sign of uncertainty about Ueda's own view, the yen gave back some of its gains after he expressed support for the central bank's current position.
The yen jumped more than 1% and hit ¥129.8 per dollar after reports emerged that the government will nominate Ueda, a former member of the central bank's policy board, as the Bank of Japan's next governor.