LONDON : Japan’s election could prompt the next market gyrations in a year in which countries housing half the world’s population will have voted. But markets remain fixated on the U.S. presidential election – the race that counts most for investors and global leaders alike.
Here’s a selection of recent, and upcoming, votes and how they are impacting markets.
DEVELOPED MARKETS
1. JAPAN
An uncertain outcome in Sunday’s election could generate further shocks for markets still reeling from July’s surprise Bank of Japan rate hike.
Japan’s premier Shigeru Ishiba supports normalising monetary policy to boost the yen and bank profits. But his recent unpopularity suggests Japan is heading for a coalition government, and some opposition parties want stimulus to continue.
This could complicate the BoJ policy outlook, raising yen volatility. Bets on the yen, trading near 152 per dollar, have swung rapidly from weakness to gains since July. The BoJ’s Oct. 31 meeting could be caught in the cross-hairs of coalition horse trading.
2. UNITED STATES
Democrat Vice President Kamala Harris and Republican former president Donald Trump are in a dead heat before the Nov. 5 U.S. election.
Traders are taking seriously the chances of a Trump win, which could spark higher tariffs. That has stoked support for the dollar, as consumer price rises could reduce U.S. rate cuts.
Bets on Trump tax cuts have helped drive U.S. stocks to record highs but the rally has stalled as uncertainty weighs. Gold is near record highs on haven buying, and the VIX index of expected stock market swings sits above its 2024 average.
Investors are also bracing for a contested outcome, if the results are close.
3. BRITAIN
Britain’s Oct. 30 budget could determine whether investors keep their post-election optimism or succumb to concerns over finance minister Rachel Reeves’ gloomy analysis of the economy.
July’s landslide win
