USD/JPY noticed pretty whippy trades this morning, probably in response to Higher Home election outcomes amid skinny market liquidity as Japan markets are closed for holidays. USD/JPY final seen at 147.92, OCBC’s FX analysts Frances Cheung and Christopher Wong notice.
Markets maintain a glance out on what could come subsequent
“Bullish momentum on every day chart intact however there are indicators that RSI is popping decrease close to overbought circumstances. 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). Higher Home election outcomes confirmed LDP-Komeito coalition is ready to marginally lose the bulk. Vote depend reveals ruling coalition dropping Higher Home majority with 122 seats whereas opposition occasion received 125 seats (125 seats wanted for a easy majority).”
“At time of writing, there may be 1 extra seat up for grabs. Whereas USD/JPY traded uneven, the pair didn’t considerably rise in a disorderly method. Worth motion means that pessimism – coalition to lose Higher Home majority – was already within the value. The dangers to look at subsequent are 1) how opposition events would push for discount in taxes and/or elevate spending, in flip including to the danger that Japan’s credit standing could face a downgrade (as per Moody’s warning).”
“Constitutional Democratic Celebration chief Noda already instructed a press convention in a single day that CDP occasion will resubmit a invoice to abolish provisional gasoline tax, concentrating on to assist decrease fuel costs; 2) if opposition events could desk a movement of no-confidence, resulting in additional political uncertainty. For now, PM Ishiba had vowed to remain on regardless of the setback whereas markets maintain a glance out on what could come subsequent.”
