Citibank issued a statement addressing the possible results of the LDP presidential election in Japan and its impact on the USD/JPY pair.
The financial services firm noted that it is difficult to predict the impact of the elections on the exchange rate due to the crowded nature of the election race.
According to Citi, the main risks to USD/JPY depend on the winner of the election. If Sani Takaishi wins, it could be seen as a negative for the normalization of the central Japan’s monetary policy, which could lead to a weakening of the Japanese yen.
Conversely, a victory for Shigeru Ishiba could signal a move away from Abenomics-style policies, which could lead to a strengthening of the yen.
Despite the uncertainty, Citibank’s forecast for USD/JPY remains unchanged. The company expects that the currency pair will not fall below 140 yen/USD until the following year. However, there is also the possibility of a retracement to the range of 151 yen/USD to 155 yen/USD before that time.
City stressed that although the risks tend to fall for USD/JPY, they do not expect a significant deviation from the current scenario.
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This outlook indicates a level of stability in the currency pair, despite influential political variables. Citibank’s analysis suggests that the results of the elections are awaited, given their potential implications for currency market dynamics.
This article was translated with the help of an artificial intelligence program after an editor’s review. For more details please refer to Banha Terms and Conditions
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