Forex Flash: USD/JPY sets new highs amid BoJ nomination – UBS

The USDJPY rose to a new multi-year high of 94.77 overnight after several Japanese newspapers reported that Haruhiko Kuroda has won the government's nomination for Bank of Japan Governor. The same reports claimed that Kikuo Iwata has been selected as one of the two deputy governors – a fact he himself confirmed later.

There has been no official confirmation from the Abe administration yet, although local media suggest a formal announcement is due by mid-week. Elsewhere, sterling fell further overnight in the wake of Moody's decision to strip the UK of its Aaa rating shortly before the New York close on Friday.

According to Research Analyst Gareth Berry at UBS, “Although attention will focus on how the Gilt market digests the news later today, our Gilt strategy team are not overly concerned about the immediate consequences given the decision itself should come as no surprise. Instead, we expect the currency to bear the strain and we remain short Cable as a trade recommendation.”