Yen in focus as Abe's popularity declines - Nomura

Analysts at Nomura explained that JPY has been in focus this week as polls continue to show continued declines in Prime Minister Abe’s popularity. 

Key Quotes:

"However, as opposition parties are performing weakly and Abe’s support within the LDP is solid, risk of near-term regime change remains low, in our view. Meanwhile, the benign risk environment should support equity prices and therefore USD/JPY, but recently this correlation has broken down."

"The recent trading behaviour continued around the FOMC meeting, and the further decline in rate hike expectations weakened USD/JPY."

"JPY still tends to weaken against commodity currencies and most European G10 currencies when risk sentiment improves, and the lack of surprises from the Fed may sustain the trend of gradual JPY weakness against these currencies for the time being."