Forex: USD/JPY climbs to 100.36 after Abe election win
_iNVEZZ.com Monday July 22nd:_ In today’s early Asian session the yen firmed against the greenback, with the pair falling to a two-day low at 99.59, and apparently supported by the market’s expectations for Prime Minister Shinzo Abe’s enhanced ability to push through reforms following yesterday’s upper house election outcome. Later in Asian trading though, the USD fought back and the pair rose to a current intraday high at 100.36, putting on 0.77 percent in just one hour.
Bank of Japan Policy Board member Takehiro Sato said today in a speech to business leaders in Fukushima that the central bank has abandoned its previous approach of taking incremental policy action but will not rule out further steps if unexpected risks to the economy should emerge.
Sato, an economist who joined the BOJ last year, voted for the central bank’s aggressive monetary stimulus in April but has since voiced doubts on the feasibility of its pledge to achieve two percent inflation in roughly two years.
Japan’s governing Liberal Democratic Party’s (LDP) seeming victory in yesterday’s Upper House elections has boosted the prospect of stable government for the next four years, and increased the likelihood that Prime Minister Shinzo Abe will be able to continue his ambitious programme of economic reform.
Abe’s LDP and its New Komeito ally have now reportedly secured 135 of the 242 seats in the upper house, with control of the lower house since elections in December.
He said today that his government will remain focused on defeating deflation, with specific issues including whether and when to cut corporate taxes, reduce labour regulation, free up imports and make it easier to consolidate agricultural land.