Japanese Yen Stable as Ruling Party Secures Majority, Boosting Fiscal Stimulus Prospects

The Japanese yen remained stable after an initial dip in early trading following the ruling Liberal Democratic Party's decisive victory in securing two-thirds of the 465 seats in the House of Representatives. According to Jin10, this outcome paves the way for Sane Takai to implement further fiscal stimulus measures, which could exert pressure on Japanese bonds while potentially boosting the stock market. Asian stock index futures indicate that benchmark indices in Australia, Hong Kong, and Japan are set to rise. IG analyst Tony Sycamore noted that traders are capitalizing on last week's sell-off by buying on dips, extending rotation trades into cyclical stocks and moving away from technology stocks. He added that positive sentiment from Wall Street and the "Takai trade" suggest a favorable risk appetite period for Asian stock markets, at least in the short term.