The Japanese government nominated Kazuo Ueda as the next governor of the Bank of Japan (BOJ) on Tuesday.
Ueda, 71, is an academic economist and former member of the central bank's policy board.
The nominations presented to the parliament also saw Shinichi Uchida, 60, the executive director of the BOJ and Ryozo Himino, 62, the former head of the Financial Services Agency for the post of deputy governor.
Current governor Haruhiko Kuroda will end his term on April 8, while the terms of his two other deputies will end on March 19.
Why is this news important for investors?
It is well known that the governor or head of the central bank is the individual who will determine the direction of a country's monetary policy.
With the appointment of Kazuo Ueda, investors expect a change in the policy setting of the central bank which currently implements a very loose policy under the Kuroda administration.
Even so, Ueda's latest statement last Friday has caused investors anxiety, where he believes the BOJ's current policy is 'appropriate'.
As a result, the yen traded down to a 6-week low against the US dollar at the start of the week.
If the reader remembers, the yen plunged to a 33-year low last October when most other major central banks raised interest rates, while the BOJ remained on loose policy.
If it is true that Ueda will also implement a dovish stance, it will be a 'nightmare' for yen investors.
