USDJPY forecast
                     USDJPY forecast 
Impact of Abe's 
resignation on the Yen
The Japanese Yen (JPY) is 
one of the most traded 
Asian currencies in the 
The US dollar has had the 
financial markets. 
hardest blow following the 
effect of the pandemic in 
And its pair with the US 
the US, which has greatly 
Dollar – USDJPY, forms one 
affected businesses there.
of the four major currency 
On August 27, 2020, U.S. 
pairs, which are some of 
the most traded currency 
Federal Reserve Chairman 
pairs in Forex.
Jerome Powell, unveiled 
Since December 2016, the 
Fed’s tactic to the current 
USDJPY has been on a 
inflation. However, the 
bearish trend implying the 
speech hinted that the 
Japanese Yen has been 
current low rates will 
bullish.
continue for a longer 
period.
 And that trend played well 
into the current economic 
 Following Powell’s speech, 
crisis around the world due 
the USD index used to 
to the COVID-19 pandemic.
track US Dollar greenback 
against other currencies 
registered a drop of about 
0.09%.
Shinzo Abe’s Resignation
Following the announcement that the current 
Japanese Prime Minister, Shinzo Abe, will be 
stepping down, there was scepticism of how the 
Japanese Yen will behave in the market with 
some fearing that there could be a shift in policy 
in Japan.
However, since the ruling Liberal Democratic 
Party in Japan still holds power, experts do not 
see a significant shift in Policy. The party is to 
elect its leader on September 14, 2020. 
The biggest threat to Japan’s policy continuity
Shigeru Ishiba, who is the former Japanese Defense minister is seen as the biggest threat to the Japanese policy 
community. If elected, there could be ramifying policy changes, which would affect the Japanese Yen standing in the 
international market.
Ishiba currently seems to command a huge following in the public opinion though he lacks the Liberal Democratic 
Party’s support.
Best bet according to analysts
Yoshihide Suga who was the chief cabinet secretary under Shinzo Abe announced that we will be running for the 
prime minister’s post two days after Abe’s announcement that he would be resigning.
Suga has good support of the Liberal Democratic Party and is expected to continue with Abe’s policies if elected to 
become the next prime minister.
One of the main things that analysts look forward to is the fiscal and monetary stimulus programs that were rolled 
out during Abe’s tenure. It would be advantageous to the Japanese Yen if the next prime minister expanded these 
stimulus programs.
USDJPY – what to expect towards and after the Japan PM elections
At the moment, the USDJPY is expected to continue with its bearish trend mainly due to the weakening of the US 
Dollar and the Fed’s accommodative shift in how he Central bank responds to the inflation that was outlined in 
their recent report made through Powell’s speech.
If Suga wins to become the next Japanese prime minister in September, we could see a more determined JPY; 
meaning a stronger bearish trend for the USDJPY.
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