Big week for USD/JPY with the Fed tomorrow and the Japanese election on Sunday.
Polls show the opposition LDP winning around 300 seats in the 480-seat lower house. Such a win would give LDP leader Abe the mandate to push through radical reforms to beat deflation.
A key number to watch is 320: that’s the number of seats the LDP needs for a two-thirds majority that would allow the lower house to override the upper chamber and push through any legislation.
As many as 40% of Japanese voters remain undecided and enthusiasm for the LDP is minimal so I suspect a two-thirds majority is unlikely and that could weigh on yen crosses.