USD/JPY volatility to persist on broad uncertainties
Oct 28 (Reuters) -Japan's Diet Lower House elections have resulted in a resounding loss for the Liberal Democrat-Komeito coalition nL1N3M300Q. USD/JPY is likely to remain volatile as Japanese political uncertainty will be compounded by risks around the U.S. election,U.S. jobs data Friday and the Bank of Japan's Oct 31policy announcement.
The BOJ is not expected to hike rates on Halloween, offeringdomestic markets a treat rather than a trick especially with the political situation in flux nL4N3LR0J0 nL4N3LF09I. That said, many will be eyeing the policy statement and outlook, and Governor Kazuo Ueda'spress conference.
The U.S. jobs report Friday could significantlyimpact Treasuryyields and theyield curve. Unemployment is seen unchanged at 4.1% and non-farm payrolls up 123,000 versus a rise of 254,000 in September.
U.S. elections on Nov 5may prove to be the biggest uncertainty nL4N3M0220. Markets seemto be tilting towards a Donald Trump victory but a Kamala Harris presidency is not an impossibility. A Trump win is perceived as signallinga strong U.S. dollar and higher U.S. rates.
USD/JPY rallied to 153.88 EBS in Asia following the ruling LDP-Komeito coalition loss. The Nikkei initially fell after the openbut has since rallied as offshore investors recouped stocks sold last week withlikely related currency hedges nL1N3M400X.
Although USD/JPY is on a much higher perch and well-above the 150 level viewedby Japan's Ministry of Finance as "excessive", Tokyo players think theMOF will find it hard to intervene to push the yen higher given the currentpolitical situation.
Higher or lower, USD/JPY is likely to see extreme volatility in the days ahead. Related nL1N3M400E, nL1N3M30FI.
For more click on FXBUZ
USD/JPY weekly: https://tmsnrt.rs/3Ads6TG
Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
