JPY selling induced by Japan Prime Minister Noda's call Wednesday for a near-term election will likely be short-lived, says Junichi Ishiakwa, forex analyst at IG Market Securities in Tokyo. He notes a rise in U.S. bond yields will be necessary for the USD/JPY to breach resistance in the mid 80s and at 80.65. He adds concerns over the U.S. fiscal cliff and growing tensions in the Middle East have increased demand for safe assets, shifting funds to the U.S. bond market and bringing down yields; "once the frenzy over the news from Japan cools, USD/JPY selling pressure could strengthen as the market returns its focus to U.S. fundamentals." The USD/JPY is at 80.19.
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