The USD/JPY is likely to hover around 80.00 today as expectations that Japan's next government will pursue stronger monetary easing clash with concerns over the U.S. fiscal cliff, says Masafumi Yamamoto chief forex strategist at Barclays in Tokyo. Japan's prime minister Wednesday called for near-term elections, raising expectations that the main opposition party leader Shinzo Abe, a strong proponent of bolder BOJ easing, may become the next prime minister. "But expectations of a weaker yen may be too high," he says, adding there was risk that once such expectations calmed and worries over the U.S. fiscal cliff kicked in, the USD/JPY could fall back to the 79 level. The USD/JPY is at 80.21.
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