Japan central bank deputy Uchida in spotlight while chief hospitalized

The Bank of Japan (BoJ) announced that the governor had been hospitalised due to a health issue identified during a routine check-up and that his current responsibilities had been transferred to Deputy Governor Shinichi Uchida. According to Nikkei Asia, a BoJ spokesperson said the governor's condition was not serious and that the interest rate policy meeting would go ahead as planned. Uchida has previously moved markets with his comments on the weak yen.

BoJ watchers noted that Uchida had previously taken a more hawkish stance on monetary policy normalisation. Investors are weighing the impact of the governor's recovery process on the policy direction. The Finance Minister said the government respects the BoJ's independence and is monitoring yen exchange rate movements.

The yen traded at around 159 against the dollar after the announcement and moved within a narrow range during the session. The Nikkei 225 index closed flat on the Tokyo Stock Exchange. Analysts expect the BoJ to maintain a wait-and-see approach at the June meeting and continue to price in a 25-basis-point hike by year-end. This is not investment advice.