Relationship Between Abe and Japanese Yen
Shinzo Abe, the longest-serving Japanese Prime Minister in history, has suddenly resigned on August 28, citing health reasons. He will remain in his post until a successor is chosen. Mr Abe said he would still participate in the parliamentary vote and would not completely withdraw from politics.To get more news about WikiFX, you can visit wikifx official website.
On September 26, 2012, Shinzo Abe was elected as the president of the Liberal Democratic Party and won the general election later on December 26 in the year. After he became the president, the Japanese yen shrank from the peak of 77.13, while after he became the Prime Minister, the country‘s currency kept slipping till June, 2015 and bottomed at 125.86. The reason is the well-known 'Abenomics', which aimed to stimulate Japan’s exports and prevent the worsening deflation by exerting a big depreciation in the value of the currency.
Japan‘s economy once recovered because of the Abenomics, and investors even regained confidence amid the successful Olympic bid. However, no one has ever expected that the outbreak of COVID-19 would completely destroyed the Abenomics and made Abe drained and resign from his post. After Abe announced his resignation, forex traders bought the yen aggressively as no one could anticipated who’s his successor and whether the following policy would be in line with Abes.
On the other hand, Japan‘s stock markets went into a tailspin on the news of August 28. With the unwinding of carry trade and the rising risk aversion, the yen appeared to be strong and popular again. Under the Japan’s uncertain political situation coupled with the continued weakness of the U.S. dollar, the yen has the opportunity to maintain its strength in the short term and challenge the two major resistance levels of 104.19 and 101.48.