Grinds Higher, Looks Past Domestic Politics

USD/JPY climbed yesterday, with a positive showing from European/U.S. equity markets and a broad-based appreciation in USD driving the move. The rate punched through the Y106.00 figure, but struggled at Y106.30 and eased off highs after testing the latter level twice.

• Much attention has been recently devoted to the Japanese prime minister race, started by PM Abe's announcement that he will be leaving the post. On Wednesday, the apparent front runner, Chief Cabinet Sec Suga, formally announced his candidature and pledged to continue Abenomics.
• That being said, market reaction to Suga's presser was very muted.
• Elsewhere, Japanese Meteorological Agency has issued a warning against two typhoons, one of which is already hitting the South West.
• USD/JPY last trades +4 pips at Y106.22, with bulls looking to take out Aug 28 high of Y106.95, before targeting Aug 13 high of Y107.05. Bears need a dip through Aug 28 low of Y105.20 to bring Aug 19 low of Y105.10 into play.
• Locally, focus turns to final Jibun Bank Services/Composite PMIs and a speech from BoJ's Kataoka, both due later today.