The Japanese yen could gain if Shinjiro Koizumi emerges as the next leader of Japan’s ruling Liberal Democratic Party, MUFG Bank strategist Lee Hardman said. He noted that the bank’s call for the Bank of Japan to resume rate hikes as early as October assumes a Koizumi victory, which would reduce political uncertainty and bolster confidence in tightening policy.

Polls suggest support among LDP members is split between Koizumi and Sanae Takaichi, who is closely linked to former Prime Minister Shinzo Abe and his preference for loose fiscal and monetary policy. The leadership election will be held on Saturday.

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Earlier this week:

• Japan leadership contender Takaichi drops hint she may renegotiate trade deal with the US

This article was written by Eamonn Sheridan at investinglive.com.

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