Support for Koziumi underscores Yen strength

When Junichiro Koizumi, Prime Minister of Japan, failed to receive the support of the legislature in his bid to privatize Japan Post, he immediately called for a snap election. On September 11, voters must decide whether to grant Koizumi more power in liberalizing Japan’s economy, as well as the authority to trim government spending and public debt. While polls indicate 50% of Japanese currently support Koizumi, many investors are much more bullish, going so far as to price a Koizumi victory into markets. Investors believe the Japanese economy would surely benefit from such a victory, as would the Japanese Yen. Bloomberg News reports:

Demand for the yen may increase on speculation an election win will give Koizumi more power to push through policies to bolster the economy.

Read More: Yen May Gain After Second Poll Shows Koizumi's Rating Increases