Yen Crosses Positioned To Trade Higher As Abe Wins The Election…


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(JP) Follow-up: LDP-New Komeito formal coalition said to win 325 seats in 480-seat lower house of Diet – Nikkei News

  • Above 320-seat threshold for super-majority to supersede legislation of the upper house.
  • Voter turnout in  the House election is estimated at 59.52% (record); prior record low was 59.65% in the 1996 election.

(JP) PM-elect Abe said to be looking to draw up a supplementary budget of up to ¥10T for FY12/13; Japan to issue new debt to secure funds for budget – Nikkei News-

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  • Also intends to seek other parties’ cooperation in the upper house instead of using the super-majority.

How to interpret these headlines?

With the LDP and New Komeito coalition, Abe, the PM-Elect, will have the support he needs to pass his agenda, thus it’s likely that we’ll see weaker JPY in 2013.  If Abe were to keep his words, namely having an inflation target of 2.0% by aggressively depreciating the JPY, I wouldn’t be surprised to see USDJPY re-approach the 90 to 100 level.

The key to successful Forex trading is to identify moments like this, a turning point of sorts, especially for the JPY.  Although I don’t expect a straight line decline, I fully expect to see gradual and steady depreciation of the yen, which makes JPY buying a big no-no.  As a matter of fact, I’m calling for BUY ONLY trades on yen crosses (LONG EURJPY, GBPJPY, CADJPY, USDJPY, etc…) as the overall market sentiment, fueled by risk appetite, will add more momentum on shorting JPY.

I’d also recommend to use patience, as the trend leading up to the election has already pushed JPY to the same resistance level post BOJ intervention, which means we could see some some profit taking from the recent run up, giving us an opportunity to place our trades.

I’d definitely be looking at around the 83.00 level for the USDJPY for potential LONG entries, and you could definitely trade other yen crosses instead when USDJPY drops to the 83.00 level.

Forex Weekly Outlook May 22 ~ 26, 2017
Forex Weekly Outlook – May 15 ~ 19, 2017
Japan’s below zero rates complicate BOJ’s efforts to kick-start growth, end deflation
BOJ cuts key interest rate to -0.1%, will cut lower if needed
Central banks cannot keep pumping cheap credit into series of asset bubbles
About Henry Liu

My name is Henry Liu and I am a Forex Trader and Mentor. I help traders achieve consistent income trading Forex while spending less time trading. My focus in trading is a combination of Fundamental Analysis, Technical Analysis, and Market Sentiment. Far too many retail Forex traders concentrate on just one aspect of trading, technical analysis, and ignore everything else; it is my goal (and vision) to educate every trader on how to take advantage of news trading and become more balanced traders.

You can find more information about me on my Google Profile.


  1. sir your analysis are great i am working with your analysis thanks Henry Liu

  2. you are one of the best fundamental analyst i’ve come across. KEEP IT UP

  3. starpicj iwuji says:

    you are my man of the year.
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  4. Thanks Henry for your analysis.Please keep up the good work.

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