Yen weakness resumes on election talk

USD/JPY has remained bid in Asia with investors starting to wonder where to next for the pair.

Japanese Yen
Source: Bloomberg

There were a couple of major developments, as Abe called a snap election and delayed the sales tax hike by 18 months. The election is likely to be held as early as December 14 and it’s being seen as a referendum on Abenomics. As a result, a sweep for Mr Abe in the elections would be a resounding positive, as it gives him a license to press on with some aggressive measures. Analysts feel this election is a ploy by Abe to breathe fresh life into his agenda and potentially gain more ground as the opposition is currently in a shambles. Abe is also likely to put aggressive reformers in key posts as he presses on with his strategy. USD/JPY printed a high of ¥117.22 in Asian trade and remains just shy of that mark. Traders are cautiously waiting for results from the BoJ meeting which is currently underway. While nothing is expected from the BoJ meeting, you get a sense a surprise is not off the table. I continue to feel buying dips in the pair is a preferable strategy. Chasing the price higher often leads to traders being caught out, particularly for USD/JPY which is significantly overbought. The next key level for the pair is 117.93, which is where October 2007 highs come in.


IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.