It’s all about the Japanese election, which takes place on Sunday.
There isn’t any question about the outcome of the election — the opposition LDP are well-ahead in the polls. The uncertainty surrounds how many seats they will win in the lower house. The key number is 320 which is the number of seats required for a two-thirds majority.
Odds are low that they make it to 320 but there are a number of way they can piece together a coalition that gives them 320 — which is enough to dictate policy without the upper house.
What adds uncertainty to the results is that nearly 40% of voters remain undecided and the LDP isn’t exactly beloved — they ran the country for most of the post-war period.
Today represented some profit-taking on longs ahead of electoral uncertainty. With elections, there is no such thing as a sure thing.