Going for par

The LDP victory is another feather in the abenomics cap. Now for the flurry of investors rushing to USDJPY, Nikkei and other Japanese assets. Perhaps even JGBs! Though for JGBs we think that Treasuries matter more and that relationship probably deserves greater attention.

Meanwhile, USDJPY above to 103.50 and likely 105 in the coming months. It can help the US dollar index get back a couple of percent higher for now as its multi month choppy ascent continues. If 'risk' is measured by local stock market price action, this should be healthy. Even healthy for EM, despite JPY weakness, for we think that confidence has improved, in contrast to a few months ago. This is exemplified by gold and oil having recovered and global assets holding up fairly well along with this. It's not a hole in one by any means but at least we can go for par on this punishing financial course.

Hurrah Mickleson.