Real results from Japan’s elections show the following picture: LDP and New Komeito have over 320 seats needed for a two thirds majority in the lower house of parliament, which consists of 480 seats.
This means it will be easier for them to purse new fiscal and monetary stimulus, which is set to weaken the Japanese yen. For USD/JPY, we could see a “buy the rumor, buy the fact” behavior, with a challenge of key resistance.
According to The Japan Times, LDP won 291 seats, and New Komeito got 29. Together this is exactly 320, and there are still 11 out of 480 seats that are uncounted.
Update: as counting proceeds, it is now known that LDP won 292, NK won 30: this is already 322 – more than two thirds.
Update 2: Analysis: It’s ALL about the Yen
Initial exit polls already gave the LDP party led by Shinzo Abe an absolute majority, with at least 275 seats, far more than 241 which means an absolute majority. The current ruling party, DPJ, won 55 seats so far, in line with exit polls. Prime minister Noda conceded and announced his resignation.
USD/JPY touched the 84 line towards the elections, but fell short of the 84.18 peak. It continued trading higher, within the uptrend channel. The next resistance line is 85.50 if 84.20 is broken. Support appears at 83.34. For more, see the USD/JPY forecast.
Not all currencies are expected to react in the same manner. Here is a guide: Japanese Elections: Potential Reaction of Currencies.
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