USD/JPY: testing critical resistance - Scotiabank

Analysts at Scotiabank explained that the USD/JPY retains a soft undertone amid rising speculation that PM Abe will call a snap general election. 

Key Quotes:

"Local reports suggest the prime minister will make the announcement on Sep 25 and the election will be held on Oct 22."

"JPY vols are rising on political risk although Abe is calling the early vote from a position of relative strength following his robust response to the recent North Korean missile tests."

"USD/JPY short-term technicals: Neutral/bullish—USD/JPY is well-supported on the short-term charts, with gains through short-term cloud resistance leading the USD to test daily cloud resistance at 111.65/retracement resistance at 111.76 (61.8% of the 114.50/107.35 drop)."