The USD/JPY is higher amid growing expectations for an early general election in Japan and more aggressive easing steps to be taken under a new Japanese leadership, says Takao Yahata, chief manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking Corporation. The head of Japan's main opposition Liberal Democratic Party, Shinzo Abe, said his party would accept conditions laid down by Prime Minister Yoshihiko Noda earlier to dissolve parliament and call an early election. Abe is the leading contender to become Japan's next prime minister and has indicated his administration would put increasing pressure on the Bank of Japan to undertake more aggressive monetary easing. Non-Japan participants are selling the JPY "undoubtedly with their eyes set on a dissolution of the parliament and the general election," Yahata says. "Expectations are growing for more aggressive BOJ easing steps" such as a higher inflation goal and buying of foreign bonds. The USD/JPY is at 79.98 from an earlier low of 79.38.
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