FXStreet reports that economists at MUFG said that it has just been confirmed that Fumio Kishida has won the LDP leadership election effectively confirming him as Japan’s next PM. But the yen will continue to weaken due to rising US bond yields.

“A Kishida victory was the scenario that would mean the least potential for JPY reaction given he is seen as the candidate least likely to instigate any dramatic near-term changes in policy. This Kishida victory should see the emphasis on policy continuity which should limit JPY volatility.”

“It goes without saying that what is happening with UST bond yields and global yields matter more for near-term JPY direction – which is currently supportive of JPY weakness.”