The JPY slumped at the outset of trading overnight in response to the results of Japan’s elections on Sunday, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

JPY slides after LDP loses majority

“The ruling LDP and its coalition partner lost their majority in the lower house, raising concerns about the shape and policy direction of the next government. Markets have also trimmed BoJ tightening expectations marginally (helping boost local stocks).”

“USD/JPY traded through the upper 153s in early dealing before falling more than a big figure, helped by a drop in US Treasury yields and a general pullback in broader USD strength. Spot remains below our estimated fair value of 154.09 today, however.”