A stubborn block of JPY strength was removed from the market on Sunday.

The broadly expected victory by Japanese Prime Minister Shinzo Abe in the snap election he called to extend the Liberal Democratic Parties control will ensure a same line of thinking in Japan that has helped the JPY find persistent selling after fears subside.

Over recent weeks, I have written pointedly about the concentration of time-specific options for JPY Calls (right, but not the obligation) to buy JPY (USD/JPY lower) if an unthinkable election outcome would result. A defeat for Japan over the weekend would have been similar to the immediate Brexit aftermath as a new government would have needed to have been put together and the work done by the BoJ to have a balance sheet of purchased assets more extensive than the US Federal Reserves would need to be addressed about unwinding as well. However, the election outcome favored theincumbents, and in so doing, the options to buy JPY and push USD/JPY lower were unwound while other themes like higher equity markets like the Japanese Nikkei and SPX 500 alongside higher US Yields favor a rising USD/JPY.

The offers to sell NZD keep coming and on Monday the price of NZD weakening remained a dominant theme. The formation of the new government that has made statements on how the NZ economy ‘lives or dies by exports’ and that sees the RBNZ’s mandate as maybe needing to be changed favor full employment favor a weakening NZD to help boost exports and thereby employment in an export-dependent economy.