AUDJPY resumes its upward movement two days before the uncertain parliamentary elections in Japan. The recent correction ended with a rebound off the 10-day exponential moving average (EMA10; yellow), pushing the exchange rate back above 96.80 (+0.6%).
The yen remains one of the weakest currencies in today’s session as markets await Sunday’s parliamentary elections. The recent weakness of the yen indicates that investors are seriously considering the possibility of current Prime Minister Shigeru Ishiba losing his majority.
On the other hand, it seems the market has already become accustomed to the prospect of political instability and concerns about excessive fiscal expansion. This is reflected, among other things, in the correction in Japanese long-term bond yields observed this week — 10-year yields have fallen from Tuesday’s 1.59% to 1.555%, while 30-year yields declined from 3.181% to 3.118%.
Source: xStation5
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