Japan has an election coming up on Sunday, and here’s the main thing you need to know: The frontrunner, former PM Shinzo Abe, has been making very loud noises about pushing forth a very expansionary, pro-inflation policy at the Bank of Japan.
Japan has historically had a horrible time fighting deflation, but monetary policy regime change is in the air all around the world from the US (which adopted an “Evans Rule” — threshold specifications for when it wil tighten next) to the Bank of England (which poached Canada’s well liked Central Banker), and now possibly to the Bank of Japan. Possibly.
In an anticipation of this shift, the yen has been getting creamed.
Here’s a chart of the dollar surging against the yen in recent weeks.