USD/JPY: watching the LDP leadership election on 20 September - Nomura

Analysts at Nomura noted that the LDP has officially announced that it will hold its leadership election on 20 September. 

Key Quotes:

"The election essentially determines the Japanese Prime Minister and thus, the outcome influences Japan’s economic policy stance for the next three years."

"PM Abe’s victory looks the most likely outcome, as the cabinet’s approval rating has been stabilising at a healthy level and most of the LDP’s major policy factions have announced they will support PM Abe."

"Political uncertainty rose temporarily from March to April, but the domestic political environment is likely to remain market friendly, supporting yencrosses and Japanese equities, while limiting upside room for JGB yields."