The pair is likely to maintain a firm undertone today amid concerns that the main opposition, Liberal Democratic Party will defeat the ruling Democratic Party of Japan at the next month’s general election, and that the LDP will seek a more aggressive monetary easing. LDP chief Shinzo Abe said yesterday that the biggest concern for Japan is prolonged deflation and a strong yen, while calling for “unlimited” monetary easing by the Bank of Japan. As a result, the yen reached Y81.46 against the dollar, the lowest since April 25 when it stood at Y81.69. Meantime, incumbent Prime Minister Yoshihiko Noda is widely expected to dissolve the lower house of the Diet today, after the upper house approves deficit-financing bills and a bill to slash parliamentary seats. With the pair now trading above a strong resistance level of Y80.65 where top of weekly Ichimoku charts sits, the next focus is Y84.18, a year-to-date high set on March 15. The rate moved from Y80.12 to Y81.46 on Thursday.
EasyForexNews Research Team