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Forex Today: Japanese Yen Plummets as Ruling Coalition Loses Majority

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

An election yesterday to the lower house of the Japanese Parliament saw the ruling coalition lose its majority, which triggered a further selloff in an already weakening Japanese Yen.

  1. Yesterday’s election to the main, lower house of Japan’s Parliament produced an unexpected result, with the ruling LDP-led coalition losing its majority. The likely scenario now is that it will be able to remain in power but will have to expand its coalition, which will likely mean a bit more political pressure on the Bank of Japan. The Yen has been selling off for a few weeks now, having already seen dramatic swings up and down over the past year – there is plenty of volatility in this currency. The USD/JPY currency pair rose to a new 3-month high price above a very pivotal former resistance level near ¥153, but moving averages suggest it is too early for trend traders to jump on this momentum.
  2. Friday night saw a significant Israeli military strike on Iran. It seems as if the strike achieved its aims of destroying part of Iran’s missile production chain and in destroying Iran’s significant air defences, leaving the country open to further attacks by Israel or a new attack by the USA. There had been some concern that Israel might attack Iran’s oil facilities, so the price of Crude Oil has relaxed as it has become clear that this did not happen. It is unclear whether Iran will mount a further attack against Israel as a response.
  3. Precious metals are strong. Gold reached a new all-time high last week, while Silver and Palladium also made significant long-term high prices. Trend traders will be looking to be long of all three right now. If you can’t afford futures, there are suitable ETFs owning each of these three assets.
  4. With just over one week to go to the US Presidential Election on 5th November, polls suggest a narrow victory for former President Donal Trump is the likely outcome. However, almost all polls from the swing states are showing Trump and Harris so close that anything could happen, as the numbers are well within the margin of sampling error. Betting markets suggest Trump’s chance of victory is about 60%, while pollster 538 has Trump’s chance at about 54%.

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Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

 

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