BTMU on snap elections
BTMU FX Strategy Research notes that USD/JPY tends to rise when snap elections are called, correlated to the Nikkei stock price index.
"Seasonal JPY repatriation may be dying down. Many Japanese investors may take gains at the beginning of 2H, then start taking risks again on momentum ahead of the snap election. Campaigning will get underway October 10. Politicians may start presenting their policy ideas ahead of the official election period.
The snap election may not impact USDJPY next week, as fiscal policy management, structural reform, and QQE monetary policy proposals are not likely to be very detailed," BTMU adds.
BTMU is neutral on USD/JPY around current levels seeing the pair trading in 111.50-114-50 range in the near-term.
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