Japanese PM Abe Mulls Possible Early Elections

The Japanese yen in the USD/JPY Forex market is weaker as this week kicks off. The yen is weaker thanks to reports that the Japanese Prime Minister Shinzo Abe is considering early elections.

His approval ratings have bounced back, in some polls,  to near 50 percent  and local news have quoted government and ruling party sources saying this might be enough to see him go to elections for a fresh mandate. Abe governs in a collation consisting of his Liberal Democratic Party and Komeito parties. It has been reported Abe has told representatives of both that he might dissolve the parliament. This will come after convening of the legislature on September 28.

Abe might decide to hold a snap election on October 22. Three by-elections are currently scheduled for that time. Other options, for the PM might be for later in October or in early November. These are after an expected visit by US President Donald Trump. Political sources reportedly have stated that Abe will make the call when he gets back from his visit to the United States on September 22.

The Japanese Yen could Bounce Back

Abe is under no constitutional obligation to hold an election until late next year. Abe may decide that he does not want to add to instability in a region already under pressure from North Korea’s defiance and missile threats.

Looking at the yen Forex crosses and particularly the USD/JPY, the yen seems to have weakened thanks to this new heightened political uncertainty. The USD/JPY rose a bit to the pivot at ¥111. Japanese markets thin in volume or closed Monday for a national holiday. There is a chance that the yen could move back higher on Tuesday.