Yen Lags Behind G10 Peers, Politics & BoJ Eyed This Week

USD/JPY started the week marginally higher and still sits +11 pips at Y113.61 in a mixed early part of the Asia-Pac session. The Nikkei 225 futures point to a slightly lower reopen.

• Bulls would be pleased by a rally above Oct 20, 2021/Nov 6, 2017 highs of Y114.70/114.73, which would shift focus to Mar 10, 2017 high of Y115.51. On the flip side, losses past Oct 12 low of Y113.00 would expose Sep 30 high of Y112.08, a recent breakout level. Worth noting that the RSI has now crossed below the 70 threshold, returning from overbought territory.
• Political themes are set to gain more prominence this week, as campaigning for Sunday's general election enters the final stretch. While PM Kishida has effectively shelved the market-sensitive capital gains hike proposal, but any hints on the size and details of his stimulus package would provide interest.
• The ruling LDP unexpectedly lost a House of Councillors by-election in Shizuoka prefecture, one of two races held over the weekend. Nonetheless, the LDP and its junior coalition partner Komeito are still expected to win at least a simple majority in the election to the House of Representatives on Oct 31.
• The BoJ convene this week, but won't deliver their monetary policy decision until Thursday. Data highlights include retail sales (Thursday) as well as Tokyo CPI, unemployment & flash industrial output (Friday).