JPY: Snap election officially called - Nomura

"Prime Minister Abe has officially called a snap election for 22 October. His press conference did not provide any major surprises, and the market focus will likely shift towards 1) opinion poll trends into 22 October and 2) the opposition parties’ strategies for further cooperation," argue Nomura analysts.

Key quotes:

"The latest opinion poll result shows a better picture for the LDP and Abe cabinet than in 2014, when the ruling coalition achieved a landslide victory. The possibility of further consolidation among the opposition parties remains key for the election outcome, especially as the new party, “Party of Hope”, has been officially created by Tokyo Governor Koike. We continue to judge the risk of PM Abe’s early resignation remains low. PM Abe has praised the positive impact of his three arrow policy, suggesting his support for current BOJ policy. If political surprises are avoided as we expect, monetary policy divergence will likely widen further, weakening JPY."