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USD/JPY: PM vote risk – OCBC

Japanese parliament will vote in a special session this afternoon to decide on who will take premiership. Prime ministerial vote can take up to two rounds, where in the first round, lawmakers of different political party typically vote for their respective leaders making it unlikely for any candidate to secure a clear majority. Pair was last at 153.73 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Daily momentum is mild bearish

“In this case, top two candidates will go into a run-off (in the second round) that only requires a simple majority to win. There is some uncertainty if PM Ishiba will win enough votes to lead a new government as the new PM. LDP and Komeito need support from some in the opposition to pass major legislation, including an extra budget to fund an economic stimulus package.”

“Assuming no major upset. i.e. Ishiba may still win and a minority government may suffice with opposition DPP and JIP as partners on confidence and supply agreement. Point to note is that these opposition partners had earlier critique BoJ for raising rates.”

“USD/JPY inched higher this morning. Daily momentum is mild bearish while RSI rose. Consolidation likely. Resistance here at 154.80 (recent high) and 156.50 (76.4% fibo). Support at 151.70 levels (21, 200 DMAs), 150.70 (50% fibo).”

Crude Oil tests fresh seven-day low on continued concerns about demand

Crude Oil slides by more than 1% on Monday, piling on Friday’s losses and within touching distance of a seven-day low, ahead of the publication of the monthly OPEC report on Tuesday.
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TRY: Not again – Commerzbank

The Turkish lira (TRY) exchange rate has been relatively stable in recent weeks, even versus the strong US Dollar (USD).
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