USD/JPY is holding up relatively well, presently at 98.20. There are a number of factors supporting the pairing. One of them is the uncertain political backdrop in Japan.
The Japanese opposition leader Ichiro Ozawa earlier today said he would be staying in his post despite the indictment of a close aide in a fund raising scandal. Chances of the opposition Democratic Party gaining power for the first time in over 50 years had been increasing until the scandal broke. Recent polls suggest their support has been slipping, which is clouding the outlook for a solid victory in a general election which must be held by October.
The hopes had been that a solid Democratic Party victory would help remove the current parliamentary deadlock, which is stalling policy decisions at a time when the economy is experiencing a deepening recession.
