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Beware of JPY positions in anticipation of elections in Japan on Sunda

On Sunday forthcoming parliamentary elections in Japan, according to most analysts, the current prime minister will win a second term which will enable him to complete the launched program of incentives and continue with monetary policy to lower the yen. Based on the results of the elections has several options to launch the market on Monday:

1. Complete a majority of over two thirds of MPs for the party of Shinzo Abe could lead to a sharp fall in the yen as the market will expect the continuation of policy taken to increase incentives for reaching the 2% inflation target. It is possible to see new lows in the Japanese currency by the end of next week.

2. Confirmation of the current 295 MPs for the party could lead to consolidation in the yen crosses and the possible continuation of the decline of the Japanese currency in the long term.

3. In case of loss in Sunday’s election, the market may start with a gap in favor of the Japanese currency as investors will await the results of the new prime minister and ruling party for monetary policy in sledvashtitechetiri years, which could lead to closures of profits and appreciation the yen against other currencies.

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