Yen tied to Koizumi

In the short-term, reckon analysts, the Japanese Yen will hinge on the actions of Japan's Prime Minister, Junichiro Koizumi. The reason is Koizumi is currently pushing for the modernization of Japan Post, which not only manages Japan's postal system but also represents the world's largest savings bank. Koizumi is so adamant that the bill passed, that he has threatened political upheaval should it fail. Some analysts feel Japan Post will likely be privatized, despite the uproar surrounding it, while others put the odds closer to 50:50. While analysts disagree over the bill's likelihood of success, all agree that the situation will continue to dictate the movement of the Yen. The Financial Times reports:

“It remains close, and markets dislike uncertainty, so with the data calendar light for now, the yen may face further downward pressure,” said a senior forex strategist. However a number of analysts pointed to the scope for the yen to rally if the bill is passed.

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