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Forex

USD/JPY: Higher home election Sunday – OCBC

Current polls by Nikkei, Kyodo, Asahi exhibits LDP-Komeito coalition is susceptible to shedding Higher Home election. USD/JPY final seen at 148.58, OCBC’s FX analysts Frances Cheung and Christopher Wong observe.

Bullish momentum on each day chart intact

“A complete of 125 seats are up for grabs within the July 20 election. These embody half of the seats within the Weight loss program chamber and one for the Tokyo electoral district that has turn out to be 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 will afford to lose solely 16 seats however shedding greater than 16 seats would indicate a lack of majority for the coalition).”

“Seats misplaced within the Higher Home can have an effect on Ishiba administration. Quite the opposite, if PM Ishiba/coalition manages to get previous this election, then it is going to be one other 3 years earlier than the following main election in Japan (excluding the election for LDP President in 2027). For now, the wrestle 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 impression fiscal well being and scores.”

“This briefly weighs on JPY outlook. Bullish momentum on each day chart intact however there are indicators that RSI is popping decrease close to overbought situations. Assist at 147.15 (38.2% fibo), 146.20 ranges. Resistance at 149.40/70 ranges (200 DMA, 50% fibo retracement of 2025 excessive to low).”

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