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Abe landslide Stocks up and JPY slides

Market Analysis

USDJPY, H1

The better than expected general election result for the PM Abe has helped Japanese stocks to close at record highs. The key Nikkei 225 closed  up 1.11% at 21,696, and the futures contract trades comfortably in excess of 21,700.  The expectations are for continued stimulation from the BOJ.  Conversely the JPY slide on the news with USDJPY gaping and breaking to new highs at 114.10, before filling the gap back to 113.60 to suggest further advance in the coming sessions today. Even the under pressure EURJPY broke over 134.00 before declining under the key 133.80 support. Bond yields also came under pressure following the election result with EGB yields decline, helped by Abe’s victory in Japan, which has underpinned the hopped for longer global central bank stimulus as the ECB prepares to announce its QE extension on Thursday. The 10-year Bund yield is currently down -2.0 bp at 0.43%, as the price rallies to 161.65.

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Stuart Cowell

Senior Market Analyst

HotForex

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