TD FX Strategy Research discusses its trading view for USD/JPY going its the Japanese general election on Sunday, October 22.
"The polls suggest it is increasingly unlikely that Abe will step down, but a leadership challenge next year may ensue if the LDP falls shy of an outright majority. This could also challenge the leadership at the BoJ, which leaves USDJPY at the whims of the election over the coming sessions," TD argues.
We like fading rallies near 113 and hold our short USDJPY call," TD advises.
In line with this view, TD maintains a short USD/JPY* position targeting a move to 107.