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VIEW: Friday saw Bank of America Research.....>

JAPAN
JAPAN: VIEW: Friday saw Bank of America Research question: "do Prime Minister
(PM) Shinzo Abe's falling approval ratings matter to Japan's equity and currency
markets? Likely not for now as there are signs that the ratings are stabilizing.
However, a further decline could raise the risk of an earlier internal regime
change within the LDP and impact the strategy on a snap election, thereby
affecting the risk profile of Japanese markets, in particular USD/JPY vol in
autumn when the US presidential election could raise USD vol. Note several
factors that causes us to closely monitor opinion polls.
- 1) The decline in approval appears not because PM Abe intentionally spent
political capital.
- 2) Abe's relative popularity vs LDP's popularity has fallen to the lowest.
- 3) Abe's term as the Liberal Democratic Party's (LDP) president will end in 15
months.
- 4) The economy is in a recession."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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