LDP win landslide Japanese election
City Index December 17, 2012 1:45 PM
<p>JPY opened the week in Asia some 80-90 points weaker against most of its G10 partners following a sweeping LDP victory. The LDP won 294 […]</p>
JPY opened the week in Asia some 80-90 points weaker against most of its G10 partners following a sweeping LDP victory. The LDP won 294 seats in the lower house election with their likely coalition partner New Komeito winning 31 seats giving the coalition 325 seats. The majority is more than the 320 seats that would allow the lower house to pass bills voted down in the upper house.
USD/JPY traded to a high of 84.45 with Mr Abe reiterating that he will chose a BOJ governor that supports his mandate for a 2% inflation target from the current 1% level. Japanese foreign policy is also likely to be scrutinised following comments in a recent interview that the LDP’s objective was to ‘ stop the challenge ‘ from China with regards to the islands dispute.
The risk trade was also given a boost with speculation that Republican house speaker John Boehner has proposed raising the tax rate on US citizens earning more than $1 million. This is seen as making headway towards resolving the fiscal cliff issue with EURO/$ trading a session high of 1.3205.
Supports 1.33140-1.3100-1.3080 | Resistance 1.3205-1.3285-1.3390
Supports 83.75-83.50-83.25 | Resistance 84.50-84.90-85.30
Supports 1.6145-1.6100-1.6070 | Resistance 1.6215-1.6250-1.6310
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