"Trump's main goal is to make America stronger, which we consider positive from the standpoint of the US economy. Campaign promises like infrastructure investment and tax cuts were extremely aggressive, and while they are likely to revised in Congress, they should remain substantial.

The USD/JPY rose from 75 to 125 in the so-called Abe market, then dropped back to 100. We believe the basic trend is a stronger yen, and maintain our mainline scenario that the USD/JPY will slide to the mid 90s if the US economy should look to slow next year before the details of the new administration's policies are clear.

Still, we feel that we need to assess anew the impact of policies - e.g. fiscal spending, tax cuts, deregulation, Homeland Investment Act - with the surprising Republican hold on the executive and legislative branches.

The upward/downward risk balance for the USD/JPY will depend on how we view the acceleration in US growth, rising interest rates and the equity rally".

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