• USD/JPY eased slightly on Friday as investors turned cautious ahead of this weekend’s lower house elections.
• Japan’s first female Prime Minister, Sanae Takaichi, is aiming to strengthen her hold on power in Sunday’s national election, as opinion polls point to a decisive victory for her conservative party..
• Opinion polls this week indicated that Takaichi’s Liberal Democratic Party, along with its coalition partner the Japan Innovation Party (Ishin), could secure about 300 seats in the 465-member lower house of parliament.
• Takaichi’s pledge to ease the burden of rising living costs by suspending the 8% sales tax on food triggered a market selloff last month, as investors grew concerned about the fiscal impact of the proposal.
• The vote has investors on edge because fiscal worries have sparked a stomach-churning selloff in the currency and bond markets, and a further leg lower would likely reverberate globally.
• Immediate resistance is located at 157.89(Nov 20th high), any close above will push the pair towards 159.15 (23.6%%fib).
• Support is seen at 156.51(38.2%fib) and break below could take the pair towards 155.69 (Feb 4th low)
Recommendation: Good to buy around 156.70, with stop loss of 156.00 and target price of 157.50
