The snap Japanese election is over and indications are PM Abe has won big time
- Japan elections: PM Abe big win (NHK report Abe's Liberal Democratic Party along with its coalition partner (Komeito) look ... likely above 310 seats)
What are the implications of the win? This earlier from Blackrock Investment on Abe's Japan election win.
Also, this from Nomura:
The ruling coalition's victory ... may not be a game changer for the JPY
JPY weakness ... on Monday is likely, but just a small relief rally in USD/JPY is expected now, as occurred after the previous snap elections
Domestic policy focus should shift towards the appointment of the next BOJ governor
If the ruling coalition secures around or more than 300 seats, the likelihood of PM Abe securing his third term as the LDP leader (September 2018-2021) would rise significantly.
- The risk of hawkish shift around the BOJ leadership change should diminish, which trims key uncertainties on JPY trading.
- Even though the immediate FX market reaction is likely to be muted, we think the recent political development is supportive to yen-crosses.
- The diverging monetary policy stance of the ECB and BOJ should remain EUR/JPY positive
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(Bolding mine.
& Note: The Nomura piece is from prior to the election - their forecast was of a substantial win for Abe, and NHK suggest Abe has got 300+ seats (see links above) - and the 'implications'; are relevant)
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updates:
