Introducing Kaoru Yosano: Japan's New Finance Minister

Last updated 2/17/2009 10:59 AM ET (GMT -5) 0 Comments - Add your comment

Kathy Lien

Director of Currency Research, GFT

Shoichi Nakagawa resigned as Finance Minister of Japan this morning and he will be replaced by Kaoru Yosano, the current Economics Minister who will hold both posts. Japan has been plagued with political and economic problems. Prime Minister Aso is considered a lame duck and the resignation of his Finance Minister has dealt a further blow to his approval ratings.

Nakagawa was forced to resign after acting drunk at the news conference following the G7 meeting. He slurred his speech and at one point, mistakenly responded to a question on interest rates that was intended for the governor of the Bank of Japan, who was seated to his left.

Yosano is not as charismatic as Nakagawa but he is more reliable. The budget is the primary focus of the Japanese government and since Yosano is intimately involved in discussing the budget, Aso believed that he is best candidate for the job. Yosano is also considered a fiscal conservative and is known for supporting a higher consumption tax to help balance the budget. Yosano also ran for Prime Minister against Aso, but ended up in second place. With Prime Minister aspirations, he is motivated about implementing reforms and has a goal of balancing the budget by 2010.

Prime Minister Aso's approval ratings are currently at 10 percent and if he is pushed out of office, Yosano has been floated around as a potential replacement.

Nakagawa's resignation follows reports that the Japanese economy contracted by the largest amount in more than 30 years. Combined with the strength of the Japanese Yen, this triple blow is part of the reason why the Japanese Yen weakened against the US dollar (USD/JPY) on a day when risk aversion is the primary theme in the currency markets.

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About The Author

Kathy Lien began her FX trading career 10 years ago at J.P. Morgan Chase. After graduating New York University’s Leonard Stern School of Business at the age of 18, Kathy joined the bank's interbank FX trading desk and eventually moved to the cross markets proprietary trading desk. In the interbank market, her ability to create solid fundamental and technical analysis from the myriad of information on the market helped her trade forex spot and options. Her experience eventually led her to be chief strategist at Daily FX where she worked until she joined GFT in 2008.

With her knowledge of forex, as well as her experience trading other products, such as interest rate derivates, bonds, equities, and futures, Lien has built a reputation as an international currency analyst. She is frequently quoted on CNBC, Bloomberg, Fox Business and Reuters. Lien has also written for publications like Active Trader, Futures, and SFO magazine. She is the author of the newly updated Day Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves, and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Boris Schlossberg.

To buy Kathy’s newly updated Day Trading and Swing Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves, click here.