The results of last weekend’s lower house election showed that both the Liberal Democratic Party and Komeito failed to maintain a majority, leading to yen weakness across the board in the Oceania market at the start of the week. USD/JPY rose to 153.88 yen but later fell back to 152.41 yen, close to last weekend’s closing price, as U.S. long-term interest rates declined heading into the New York market. However, with U.S. stock indexes rising and a weak U.S. 2-year bond auction, U.S. long-term interest rates went up, pushing the dollar higher across the board. USD/JPY also rose back to the lower 153 yen range by the close. The dollar remains strong due to U.S. economic strength, with factors such as rising stock prices benefiting from lower oil prices.
With the U.S. October employment report coming at the end of this week, as well as the presidential election and the FOMC meeting next week, the direction is uncertain, and short-term trading is expected to dominate.
USD/JPY Expected Range: 153.80 – 152.70
Note: The above does not guarantee profit. Please make trading decisions at your own risk.