Analysts at Nomura noted that the market's interest in Japanese politics has risen further, with Prime Minister Abe reshuffling his cabinet this week.
"There were no major surprises, as he has appointed more veterans and fewer fresh faces. There were also limited changes to economic policyrelated ministers. We believe the impact of the reshuffle on the Abe cabinet’s job approval rating should be relatively muted."
"As the reshuffle suggests PM Abe still has a solid base in the LDP, an early resignation of Prime Minister Abe, which could lead to a less dovish BOJ policy stance, remains a tail risk."
"Nonetheless, there will be new opinion polls over the weekend that will be worth monitoring. As an early snap election remains a tail risk, two lower house by-elections on 22 October will also be crucial for judging the momentum of the Abe cabinet."
"Overall, however, we think that under the Abe cabinet economic policy will likely remain accommodative, which should support foreign investment by Japanese investors, supporting yen crosses."