The Japanese yen opened sharply lower today after the ruling coalition won the snap general election over the weekend, preserving status quo and making it sure that the current ultra-loose monetary policy stays in place.
Unlike Great Britain, where the similar gambit backfired spectacularly, Prime Minister Shinzo Abe’s bid to secure power paid off. The coalition led by his Liberal Democratic Party won more than two-third of the seats in the parliament. That means that he will be able to push the three arrows of the Abenomics, one of which is to keep monetary policy extremely accommodative. That is very negative to the yen, and it explains the drop of the currency.
USD/JPY traded at 113.80 as of 13:40 GMT today after closing at 113.49 on Friday and opening at 113.87 today. GBP/JPY closed at 149.69 during the previous trading session, opened at 150.13 during the current session, and is trading at 150.02 as of now.
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