The US dollar continued to maintain its dominance in trading earlier this week. The shock in last week's Non-farm Payroll data continued to put pressure on greenback rivals. 

Meanwhile, USD/JPY pair is also disturbed by the issue surrounding the candidates to replace the governor of the central bank of Japan. It could be seen from the release in forex market. 

Nikkei, a Japan's leading business newspaper, reported that Deputy Governor Masayoshi Amamiya is likely to replace Haruhiko Kuroda to serve as Governor of the Central Bank of Japan (BoJ).

That will come with an official announcement later this month. The news had a negative impact on the yen rate, as Amamiya was reputed to be the most dovish figure among Kuroda's replacement candidates. 

Leadership Changing brings a Hope of the New policy 

As is known, BoJ Governor Haruhiko Kuroda will end his term on April 8. Market participants have long been looking forward to the moment.

They have a hope that the BoJ will change its monetary policy approach to be more hawkish after the change of leadership. Hawkish expectations are one of the factors that have pressured USD/JPY.

Before, it was known that this pair was down from the range of 150.00 to 130s in the last three months or so. But Amamiya's appointment could dash all those hopes.

Amamiya has been assisting Kuroda since 2013 in monetary policy, and is considered the most dovish among the candidates. Thus, shattering hopes that normalization of BoJ policy can develop under a new chairman.

USD/JPY is Still Bullish 

The statement above was said By a strategist at Saxo Bank, as reported by Reuters. USD/JPY set a two-week high of 132.28 in Asian session trading due to this issue. 

His position only receded after Deputy Chief Secretary of the Cabinet Yoshihiko Isozaki told reporters that the Nikkei report was untrue. Their basic stance is that they will appoint the most worthy person as BoJ Governor.

That will be done by the time when Kuroda's term ends as said by Isozaki. Despite Isozaki's rebuttal, this rumor marks an additional factor that has the potential to support the USD/JPY bulls going forward. 

USD/JPY has receded to the 131.70s as the news is written, but still tends to be bullish. Elsewhere, gold starts to limit it’s decline in the market. 

Gold Future Price Rises by 0 5%

Gold prices began to limit declines after being hit by a stronger United States Dollar supported by U.S. NFP data late last week. Spot gold prices rose by !0.3% to $1,871.25. 

Meanwhile, the gold futures prices rose half a percent to $1,886.20. In the Monday trading session (06/February) tonight, XAU/USD climbed slightly by 0.10% to $1,866.79.

U.S. Non Farm Payroll for January increased by 517,000 in January 2023. That's nearly three times higher than the estimated 185,000, while breaking the slowing trend that has been ongoing over the past four months. 

This has again raised expectations of the Hike Rate, which has been putting pressure on gold. The U.S. dollar responded to the data with a surge, and the price of gold fell dramatically by nearly 2.5%. 

Demand for Gold will Still Strong 

Nevertheless, analysts are confident that this pressure on gold prices will not last long. The issue of economic slowdown still haunts the global economy. 

In this regard, gold is still considered the most appropriate safe-haven in the threat of an economic recession. Traders will view this commodity as a safe haven asset and buy it. 

Demand for gold will still be strong this year As said by Philip Streible, ananalyst at Blue Line Futures Chicago. This week, the market's focus will be on speeches by Fed officials, including chairman Jerome Powell. 

Last week, the U.S. central bank had raised interest rates again by a quarter of a percent. The Fed's interest rate is now in the range of 4.5%-4.75%.