Japan election result – “… as expected … impact (on) yen will likely be limited”

Japan election result – “… as expected … impact (on) yen will likely be limited”

Credit Agricole getting an early Monday morning start, comments on the Japanese election result and USD/JPY:

  • Election results as expected
  • Recent stock rally already pricing in this victory – Japan stocks may face profit taking
  • Impact on the yen will likely be limited (CA cite weaker correlation between currency and stocks recently)
  • Outcome strengthens expectations for Kuroda's reappointment – but if not successor likely will have similar stance
  • Current monetary easing likely to extend
  • USD/JPY more responsive to rise in U.S. yields
  • CA also says to be aware of non-Japan factors – new Fed chair speculation, if its another dove lessens reason to buy USD/JPY here
  • CA looks for range of 110-115

(Credit Agricole CIB's FX in Tokyo – via Bloomberg)
Original Article