Dollar/Yen Reaches Highest Point Since April 2011 As LDP Win Election
The Japanese yen has seen an extension of recent losses versus the US dollar today after the LDP (Liberal Democratic Party) won in a convincing Japanese election victory, as was widely anticipated beforehand. The Liberal Democratic Party is now back in power only three years after it was last defeated.
There was a significant gap between the dollar to yen opening price today and the closing price from Friday as the USD/JPY currency pair rallied to the highest level seen in over 18-months on the back of this news.
Shinzo Abe has recently referenced "unlimited" monetary easing measures and Forex market participants have sold the Japanese yen accordingly, prior to the election. It remains to be seen now whether it is going to be a case of "sell the rumor and buy the news" with regards to the Japanese yen, or not as the case may be.
With this in mind, all eyes will now be on the BOJ (Bank of Japan) which is due to meet later in the week. Market participants will be interested in how soon the BOJ will follow up on the monetary easing rhetoric from Mr Abe.
Abe's policies have recently picked up the name 'Abenomics' and include a promise of additional public spending along with the aforementioned loose monetary policy and a bigger role for nuclear energy in the country. Mr Abe has also recently advised that he would like to strengthen ties with other Asian countries, like Australia and India, in order to help bolster his countries struggling economy.