He's likely to make more bullish comments on the economy and deflation. That will put upward pressure on short-term interest rates, which is yen positive.
More Quotes from Tomoko Fujii:
Mr. Koizumi remains willing to pursue structural reforms, so long as the economy permits. He's not going to abandon reforms. However, realistically it's also difficult to assume very quick progress.Tomoko Fujii
The trade surplus figures showed strong exports and domestic demand. This shows the economy is robust enough to withstand a rate increase later this year, supporting the yen.
Tomoko Fujii
The current-account-surplus argument is always yen supportive.
Tomoko Fujii
Press reports are pointing to a BOJ move as early as March, but I think the majority of market participants don't believe that story because such a shift could create volatility before fiscal year-end in March.
Tomoko Fujii
Expectations of further Fed rate increases haven't peaked yet, while rate hikes by the Bank of Japan are a long way off. Along with Japanese investors continuing enthusiasm for overseas assets, that will likely push up the dollar in coming weeks.
Tomoko Fujii
In general reducing the public debt will require drastic public sector reform. To implement drastic reforms, Koizumi needs to gain public support.
Tomoko Fujii
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