I posted extensively on the election and the yen response yesterday, ICYMI:
ForexLive Asia-Pacific FX news wrap: Yen, oil both sharply lower
I posted this yesterday, too. Where we’re at:
Japan’s lower house has 465 seats233 are required to form a majorityGoing into the election the ruling LDP combined with its coalition partner (which gave the two a majority in the upper house) held 288 seats in the lower houseCurrent counting has LDP 191, K 24 … so 215, well short of 233 required.Constitutional Democratic Party of Japan is the largest opposition party, they have increased their seats to 148 (91 prior)Two smaller opposition parties, Nippon Ishin no Kai (has 38 seats, from 43 prior) or the Democratic Party for the People (DPP) (has 28 seats, from 7 prior) looks likely to be the partner for LDP/Komeito to get over the 233 seat line
So, the news chatter is Ishiba will seek to bring DPP into the coalition.
For the yen and BoJ the important thing is if the DPP demands some sort of cost-of-living relief that’ll involve slower rate hikes. Going into the election the DPP seemed supportive of rate hikes, but that was then they had nothing to lose. Now, if they become partners in government they will have accountability.
This article was written by Eamonn Sheridan at www.forexlive.com.
