19 Jul 2013
Flash: Tracing the impact of the LDP on the JPY – BMO Capital Markets
FXstreet.com (New York) - Stephen Gallo at BMO Capital Markets analyzes the effects an LDP led coalition electoral outcome in Japan.
What does LDP coalition mean for JPY
According to Gallo, “We don’t necessarily see an LDP-led coalition victory in the Upper House elections as a sign that the Shinzo Abe will turn up the volume on Abenomics or JPY weakness, however, because of the widespread notion that it may, we think speculative interest to buy the JPY aggressively on dips will begin to fade more rapidly after this weekend.”
“Although evidence of Japanese domestic interest in foreign assets has been scant, there is other evidence including the contribution of domestic household consumption to GDP, trade flows, department store sales and CPI, that Abenomics is beginning to show through.”
What does LDP coalition mean for JPY
According to Gallo, “We don’t necessarily see an LDP-led coalition victory in the Upper House elections as a sign that the Shinzo Abe will turn up the volume on Abenomics or JPY weakness, however, because of the widespread notion that it may, we think speculative interest to buy the JPY aggressively on dips will begin to fade more rapidly after this weekend.”
“Although evidence of Japanese domestic interest in foreign assets has been scant, there is other evidence including the contribution of domestic household consumption to GDP, trade flows, department store sales and CPI, that Abenomics is beginning to show through.”