Analyst: Reduced Political Uncertainty in Japan Could Pave the Way for Bank of Japan Rate Hike in October

BlockBeats News, October 21st. Christopher Wong, FX strategist at Oversea-Chinese Banking Corporation (OCBC) in Singapore, stated that it was expected for Kishida Fumio to be elected as Japan's Prime Minister following the agreement between the Liberal Democratic Party and the Komeito Party to form a coalition government. The fiscal prudence demonstrated by the coalition should reassure the market and the yen. The impact of this event on the USD/JPY pair may not be similar to the post-LDP election trend, as the coalition government may require Kishida Fumio to adjust his previous supportive stance on stimulus policies. Furthermore, as the macro backdrop allows for policy normalization, reducing some political uncertainty may possibly pave the way for the Bank of Japan to hike rates on October 30th. (FXStreet)