USD/JPY: Yen is on the back foot following Abe's victory - Scotiabank

Analysts at Scotiabank commneted on the Yen following Sunday’s upper house election victory for PM Abe’s ruling coalition.

Key Quotes:

"The win has shifted the focus to Japan’s policy mix and long-rumored fiscal stimulus and delivered an impressive turn in sentiment.

Near-term risks are balanced to the downside (Yen) as we consider the outlook for relative central bank policy and the potential for a renewed firming in expectations for Fed tightening.

The 2Y U.S.-Japan yield spread has climbed roughly 10bpts from its recent lows at the lower end of the 2016 range."