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Abe may announce a snap election today – Rabobank

FXStreet (Barcelona) - The Rabobank team notes that Abe may announce a snap election today after yesterday’s Q3 GDP figures shocked the markets.

Key Quotes

“After yesterday’s shock drop in Japanese Q3 GDP we had already assumed the prospects for a further sales tax rise next October were off the table. That already leaves the BOJ buying more JGBs than are issued, effectively monetizing the huge fiscal deficit. Yet the WSJ reports today that a key adviser to PM Abe is recommending tax cuts as part of a fresh stimulus.”

“Mr Abe may announce a snap election today, and looks certain to win another term in office; however, it would seem that he is not going to run on a “three arrows” theme, but rather “one kitchen sink” (The English idiom for throwing absolutely everything possible at a problem). Indeed, the same group of advisers are also suggesting that the BOJ can do even more if the economy fails to pick up.”

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