Japan Prime Minister Shinzo Abe's ruling coalition secured a two-thirds "super majority" after winning 312 out of 465 seats available at Sunday's election. His victory softened fears that the economic steps implemented under his leadership, including an expansive asset purchase programme by the Bank of Japan, would be disrupted and halt the yen's depreciation against the dollar.

We have revised our 2017 full-year average USD/JPY outlook to 112.18 from 111.67 previously with the end period projected at 113.15. Looking at JPY/MYR, we have revised our full-year 2017 average forecast to 3.8500 from 3.8740 previously with our end period at 3.7400.

• Prime Minister Shinzo Abe’s ruling party scored a landslide win in Sunday’s election with his coalition keeping its two thirds “super majority” in the lower house after winning 312 out of 465 seats available. With his ruling Liberal Democratic party-led coalition having secured a two-thirds parliamentary, it eases uncertainty.

• His victory softened fears that the economic steps implemented under his leadership, including an expansive asset purchase programme by the Bank of Japan, would be disrupted and halt the yen's depreciation against the dollar. The USD gained as much as 0.5% to reach 114.10 after the results. It is the strongest gain since July 11.

• The Abenomics programme was implemented when the economy was in the doldrums. It has now begun to bear fruit with corporate profits having recovered, the job-to-applicant ratio improving, GDP growing for six quarters in a row and the Nikkei stock market at a 20-year high. Though it has the best chance to end deflation, we expect Abenomics will continue to have its critics.

• We have revised our 2017 full-year average USDS/JPY outlook to 112.18 from 111.67 previously with the end period projected at 113.15. Looking at JPY/MYR, we have revised our full-year 2017 average forecast to 3.8500 from 3.8740 previously with our end period at 3.7400.

Source: AmInvest Research - 24 Oct 2017