USD JPY is above 100 before parliamentary elections in Japan - 19.7.2013
The Japanese currency rose this morning. The dollar against the yen is still traded above 100, but market participants have decided to take some profits from long positions ahead of parliamentary elections in Japan that will be held next weekend. As expected, supporters of the Prime Minister, Shinzo Abe will most likely win and help holding an aggressive economic reform course in law. In this case yen probably will not collapse, but the general trend is to continue weakening. On the other hand, taking the market expectations into account, a less favorable outcome for the Abe’s supporters will be a surprise and it can cause the growth of the Japanese currency.
Other currency pairs are all relatively calm. Euro, the Swiss franc, the Australian and Canadian dollar remain within the trading ranges set earlier during the week. The British pound against the US dollar looks a little more directional, trying to stick above 1.52, around 2-week highs.
Among the most important events for today, the inflation data for Canada in June are highlighted. Market participants expect it to grow. Recall that by the end of the last meeting held earlier the Bank of Canada decided to keep the target rate for overnight transactions at 1%. In addition, the Bank stated that, with normalization of economic conditions, the gradual normalization of interest rates will be required. During the last week, the USDCAD has formed a range 1.0350-1.0450, and quitting it is able to give an impulse to the movement by 1-2 figures.