Instability of Japanese Financial Markets May Intensify Before Election

Volatility in Japan's financial markets will intensify, as a snap parliamentary election in Japan, scheduled for October 22, are approaching.

It is expected, that PM Shinzo Abe's LDP will remain the largest party. Analysts suggest that monetary policy will largely remain acceptable, regardless of who will become the new prime minister. However, fiscal policy may differ.

It is assumed, that the volatility of the Japanese market will be high as the election day approaches. Investors are afraid of uncertainty. The country's currency falls if uncertainty increases, and investors become more prone to risk. As a safe-haven currency, the Japanese yen can grow during risk aversion.