Barlcays says an easy and clear LDP victory no longer appears to be a dominant baseline scenario.
- Opposition parties are re-aligning and gathering momentum
- Putting at risk the ruling parties' majority
The bank outlines the 3 potential scenarios it sees:
- strong LDP victory (ruling parties retain two-thirds majority)
- weak LDP victory (ruling parties retain majority, but less than two-thirds)
- LDP defeat (ruling parties lose majority)
Each scenario would have different near and medium-term implications for JPY, JGBs and equities as the continuity of Abenomics and the risk of more extreme policies would come into focus
I'll see if I can dig up anything further on implications of the 3 - thoughts welcome in the comments.
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