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NHK exit polls for the elections for Japan’s upper house show that LDP and coalition partner New Komeito won a majority in the upper house. The LDP did not win a majority on its own according exit polls. Official results are due later on. USD/JPY could gap higher when markets open, even though the results was expected.

LDP is projected to have 113 to 118 seats in the upper house after the elections. Together with New Komeito, the government is expected to secure 130 out of 242 seats. In addition, the parties that are in favor of a constitutional change have not secured a two thirds majority (162 seats) needed for a change in constitution.

If the exit polls are confirmed, this is good news for yen bears: Abe has a mandate for pushing through economic reforms, but he doesn’t have the power to push through a constitutional change, such as allowing Japan to have a more serious military, something that would take a toll on the economy.

The LDP party led by Prime Minister Shinzo Abe was expected to win the elections, gaining a majority also in the upper house of parliament. They took over the country in elections for the lower house held back in December. They enjoyed a landslide victory back then.

For more on the yen, see the USD/JPY forecast.