• USD/JPY held steady on Friday as Japanese yen continue to weaken ahead of Japan upper house election.
• As Japan prepares for Sunday’s vote, the Upper House election is shaping up to be one of the most consequential in recent memory, raising the risk of political turbulence just as markets grapple with shifting rate expectations
• Recent polling indicates that the LDP–Komeito coalition could fall short of retaining its Upper House majority in the July 20 election.
• On the data front, Japan’s core inflation eased in June but remained above the Bank of Japan’s 2% target, underscoring the persistent cost-of-living pressures that have posed a challenge for Prime Minister Ishiba.
• Japan’s core consumer price index (CPI), which excludes volatile fresh food prices, rose 3.3% year-on-year in June, in line with the median market forecast, data showed on Friday.
• Immediate resistance is located at 148.97(38.2%fib), any close above will push the pair towards 151.31(23.6%fib).
• Support is seen at 147.56(SMA 9) and break below could take the pair towards 147.07 (50%fib).
Recommendation: Good to buy around 148.70, with stop loss of 148.00 and target price of 149.50
