Will a new Governor deliver real change?

Despite the headlines, the policy overhaul and additional asset purchases announced by the Bank of Japan last week were timid rather than “bold”. That was the initial reaction in the financial markets too. However, the focus has swiftly moved on to the possibility of more aggressive monetary easing under the successor to Governor Shirakawa, whose term of office expires in April. This could sustain the slide in the yen and the rally in the Nikkei well into the second quarter of the year.