USD/JPY continued to commerce increased, pushed by increased UST yields (as a result of US CPI report) and Higher Home election uncertainty. USD/JPY was final at 148.68 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong word.
Election outcomes could affect fiscal well being and scores
“Latest ballot by Nikkei, Kyodo, Asahi exhibits LDP-Komeito coalition is liable to shedding Higher Home election. A complete of 125 seats are up for grabs within the July 20 election. These embrace half of the seats within the Food regimen chamber and one for the Tokyo electoral district that has turn into vacant. The coalition held 141 Higher Home seats earlier than the marketing campaign began, and 66 are being contested.”
“Securing 50 seats will give the coalition a majority of 125 within the Higher Home (i.e. they’ll afford to lose 16 seats). However, seats misplaced within the Higher Home can have an effect on Ishiba administration. Quite the opposite, if PM Ishiba manages to get previous this election, then will probably be one other 3 years earlier than the subsequent main election in Japan (excluding the election for LDP President in 2027).”
“For now, the battle within the Higher Home has resulted in pledges of spending hikes and tax cuts in try to shore up votes. Moody’s has earlier warned that election outcomes could affect fiscal well being and scores. This briefly weighs on JPY. Bullish momentum on day by day chart intact whereas rise in RSI exhibits tentative indicators of turning decrease close to overbought circumstances. Subsequent resistance at 149.40/70 ranges (200 DMA, 50% fibo retracement of 2025 excessive to low). Assist at 147.15 (38.2% fibo), 146.20 ranges.”
