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Forex - USD/JPY higher after election results

Published 06/23/2013, 09:34 PM
Updated 06/23/2013, 09:35 PM
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Investing.com - Coming on the heels of a strong week last week, the U.S. dollar continued to trade higher against the Japanese yen Monday following the results of Tokyo area elections.

In Asian trading Monday, USD/JPY rose 0.48% to 98.33. Earlier in the session, USD/JPY traded at 98.51, the highest level in two weeks.

The pair is likely to find support at 96.85, Friday’s low and resistance at 99.45, the high of June 6.

The greenback got a bid against the yen Monday after Japan’s ruling political party raced to easy victory in Tokyo Metropolitan Assembly elections on Sunday.

While the result was widely expected, it could serve as a sign that the country’s ruling party could take control of the upper house of parliament in elections due to be held next month. Sunday’s results could also be a sign that many Japanese citizens are warming to Prime Minister Shinzo Abe’s efforts to boost the world’s third-largest economy.

Last week, the greenback surged 3.82% against the yen, the best weekly performance since December 2009, after Federal Reserve Chairman Ben Bernanke said Wednesday that the bank could begin slowing its USD85 billion-a-month bond purchasing program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.

The yen was weaker against nearly all of the major currencies, helping Japanese equities climb Monday. Some analysts expect that if USD/JPY can stay above the 95 level, more Japanese exporters will boost profit guidance. In turn, that could benefit Japanese equities which are already among Asia’s top performers this year.

Elsewhere, EUR/JPY rose 0.24% to 128.75 while AUD/JPY added 0.49% to 90.64. NZD/JPY climbed 0.60% to 76.20.


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