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Japanese Press Suggests Snap General Election Is Unlikely


USD/JPY see-sawed yesterday, but finished in negative territory. Sales into the last Tokyo fix of the month, quarter and Japanese half-FY (for the record, it was also a Gotobi day) pushed the rate lower through the second half of the Tokyo session, but the rate recoiled as London traders got in. USD/JPY slid again into the WMR fix, printing its intraday low of Y105.41. Subsequent recovery attempt proved shallow and short-lived and the rate was hovering just above Wednesday's worst levels come the end of play.

  • The Nikkei cited LDP Secretary General Nikai as noting that the ruling party will consider additional fiscal stimulus to help the economy recover from the coronavirus crisis. He added that another extra budget could be submitted to parliament during an extra session that could start on Oct 23 and suggested that there is no need to call a snap election at this point. A separate Yomiuri also pointed to low chances of a snap poll, citing unnamed government and LDP officials.
  • The rate last operates at Y105.44, 3 pips worse off. Losses past Sep 23 low of Y104.88 would open up Sep 22 low of Y104.41, followed by Sep 21 low & key near-term support at Y104.00. Bulls look for a break above Sep 30 high of Y105.80 before taking aim at the 50-EMA, which intersects at Y105.89.
  • The BoJ's Tankan report is due shortly (there is particular focus on the capex metrics), with final Jibun Bank M'fing PMI coming up later in the day. Unemployment data comes out tomorrow.

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