Political polls from the Nikkei and the Yomiuri have been released overnight showing that the Abe government continues to lose support with the dissatisfaction level now below the satisfaction level. In the Nikkei poll, the support level is at 43%, down from 49% at the last survey and below the 45% dissatisfaction result. In the Yomiuri survey, satisfaction fell 1.5 pts from the prior survey and is at 43.8%, 0.1% below the non-support levels of 43.9%.
The consequence of his deteriorating support is likely to see officials begin to panic ahead of the July upper house election and throw blame at the BOJ rate hikes for their fall in popularity. This will fuel more aggressive objections against the BOJ on rates, mirrored by comments last night from Cabinet Sec'y Shiozaki who said he expects Fukui to share policy goals with the government.
This will also underpin expectations that the BOJ is not likely to move on rates until after the elections in July. USD/JPY trades at 117.45/50 underpinned by cross plays but also by the firm tone in US stocks. The DJIA is up 87 pts currently. Offers remain on USD/JPY at 117.60 with stops at 117.85.
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