Japan: LDP win opens path to further fiscal easing and more structural reform - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that a big Upper House win for the LDP opens the path to further fiscal easing and more structural reform, and the Nikkei is cheering loudly.

Key Quotes

“The USD/JPY Nikkei correlation has never gone away and it’s the equity market dragging the currency this morning. The fact that US real yields haven’t bounced at all means I’m extremely cautious of this move, but that may come. For now, perhaps foreign investor flight from the Nikkei and the unwinding of accompanying FX hedges may slow/stop and that helps USD/JPY.”