USD/JPY gains further as Japan LDP leadership race heads to a run-off

The results of the run-off vote should be in the next hour and it’s still a close call now, with ex-environment minister Koizumi bowing out. The Nikkei is happy with the results so far at least, rallying further on the day. And that is weighing on the yen a little, with USD/JPY now inching back above 146.00 for the first time since the start of the month.

Takaichi taking the first round of votes heading into the run-off is a big deal of course. She is one of the more vocal ones on policy, having said that the BOJ has “moved too fast” in hiking rates. She wants to keep rates lower for longer, in other words.

So, that’s definitely a consideration here into how much she might pressure the BOJ into delaying any further rate hikes from hereon.

That being said, Ishiba might see better odds in the run-off as those voting for Koizumi could very well get behind him instead now. If so, we could be in for a reversal and turnaround in USD/JPY if Takaichi does not win out in the end.

This article was written by Justin Low at www.forexlive.com.