Yen is gaining ground right now, turning higher after earlier weakness. However, some expect that the yen will be losing ground quite soon, thanks to the victory by the LDP party in Sunday’s general election.
The big news out of Japan right now is that the Liberal Democratic Party won the general election in a landslide. The victory was enough to give the LDP a super-majority in Japan’s lower house of parliament. This means that upper house decisions can be blocked, and that Shinzo Abe will be the new prime minister.
Abe has already made comments that indicate that he is in favor of aggressive stimulus measures for Japan, and that means that the Bank of Japan will soon be on track to print and spend more money. The news is likely to result in yen weakness going forward.
However, this policy has not yet been enacted, and there is just enough uncertainty in the markets right now that the yen is still being looked on as something of a safe haven. While Forex traders attempt to determine their moves for the upcoming week, the yen is higher against its major counterparts. But those gains may not last much longer.
At 14:33 GMT USD/JPY is down to 83.7620 from the open at 84.3480. EUR/JPY is down to 110.2590 from the open at 111.0750. GBP/JPY is down to 135.7510 from the open at 136.3650.
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