Everyone was waiting for the big gap in UJ on Asian session Open. Didn't happen. I DO trade the Asian session. But as a general rule, everything of any significance that's going to happen, happens before lunchtime in Tokyo. I waited an hour after the Open to let the dust settle.
In yesterday's Upper House election, Abe's Liberal Democratic Party (LDP) and its partner, the New Komeito party, won at least 74 of the 121 seats up for grabs in the 242-seat upper house. With the coalition's uncontested 59 seats, that ensures it a comfortable majority, tightening Abe's grip on power and raising the chances of a long-term Japanese leader for the first time since Junichiro Koizumi's rare five-year term ended in 2006. I have seen and read English language news releases describing the election results as Abe's re-election. That is erroneous. This was an election for one of the two chambers of the legislative branch of Japan's government. While it's newsworthy that the LDP now has a voting majority in both chambers of The Diet, other factors like trade balance, investor's confidence, relations with China.....etc., also have to be included when it comes to UJ. While the election may give the Nikkei some confidence, foreign investors haven't exactly been snapping up Japanese securities. And in the end, it will be the foreign market that determines the direction of UJ in reaction to what the LDP does. The LDP has another agenda besides the value of the yen in relation to the $US. Watch for Japan to start discussing amendments to the post-war Constitution and to be more aggressive on the political and diplomatic fronts.
How will this affect UJ? Who knows. As they say, for every Bull there's a Bear. All we can do is watch and react to what the market does. As speculators, that's our job. Many people are taking a bias on what direction the yen will go and how far. Try not to be influenced by one group or the other. Just trade your charts and you should be OK. One other thing to keep in mind, for the newer traders. From now until September you're going to see the action in the markets slow down considerably. This has nothing to do with currency values. It's simply the fact that in August, most of the free world is on vacation. In September, it's back to business. So if you don't trade in August, you're not missing a whole lot. Hope everyone has a great trading week.
In yesterday's Upper House election, Abe's Liberal Democratic Party (LDP) and its partner, the New Komeito party, won at least 74 of the 121 seats up for grabs in the 242-seat upper house. With the coalition's uncontested 59 seats, that ensures it a comfortable majority, tightening Abe's grip on power and raising the chances of a long-term Japanese leader for the first time since Junichiro Koizumi's rare five-year term ended in 2006. I have seen and read English language news releases describing the election results as Abe's re-election. That is erroneous. This was an election for one of the two chambers of the legislative branch of Japan's government. While it's newsworthy that the LDP now has a voting majority in both chambers of The Diet, other factors like trade balance, investor's confidence, relations with China.....etc., also have to be included when it comes to UJ. While the election may give the Nikkei some confidence, foreign investors haven't exactly been snapping up Japanese securities. And in the end, it will be the foreign market that determines the direction of UJ in reaction to what the LDP does. The LDP has another agenda besides the value of the yen in relation to the $US. Watch for Japan to start discussing amendments to the post-war Constitution and to be more aggressive on the political and diplomatic fronts.
How will this affect UJ? Who knows. As they say, for every Bull there's a Bear. All we can do is watch and react to what the market does. As speculators, that's our job. Many people are taking a bias on what direction the yen will go and how far. Try not to be influenced by one group or the other. Just trade your charts and you should be OK. One other thing to keep in mind, for the newer traders. From now until September you're going to see the action in the markets slow down considerably. This has nothing to do with currency values. It's simply the fact that in August, most of the free world is on vacation. In September, it's back to business. So if you don't trade in August, you're not missing a whole lot. Hope everyone has a great trading week.
Attached Image (click to enlarge)
, so no harm done 
