Latest ballot by Nikkei, Kyodo, Asahi exhibits LDP-Komeito coalition is prone to dropping Higher Home election. USD/JPY final seen at 148.67, OCBC’s FX analysts Frances Cheung and Christopher Wong word.
Tentative indicators of turning decrease close to overbought circumstances
“A complete of 125 seats are up for grabs within the July 20 election. These embrace half of the seats within the Eating regimen chamber and one for the Tokyo electoral district that has grow 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’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 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 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 might affect fiscal well being and rankings.”
“This quickly weighs on JPY. Bullish momentum on every 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). Help at 147.15 (38.2% fibo), 146.20 ranges.”
