No doubt Noda’s DPJ will be trounced, but at this stage the DPJ is fragmenting as it is (barely maintaining a majority even now) and Noda wouldn’t be able to do anything other than quack if he were to stick around. He already promised an early election to the opposition earlier this year in order to get their support to push through the sales tax increase bill.

After an election the LDP probably won’t command an outright majority either, so I’m not convinced they can get support to re-write the BOJ law and essentially destroy what semblance of independence it currently has. If the LDP can do that (and is serious?), then unlimited yen printing could be on the cards, but I’ll wait and see what happens in the election before gambling on that part of the story.

Yesterday before the moved I had glanced at an iPhone USD/JPY chart (60 minutes, showing some basic MAs, 21, 55 and 100 period). It just looked as if the MAs were just starting to roll upwards after the recent dip and I thought it might move a little higher. This was around 79.50. Then the election talk started afterwards. To me it seemed the short term technicals triggered it and the news then gave an excuse for others to jump on board. Time will tell, but Japanese politicians are totally ineffective really aren’t they?