Japan

The LDP beat the government's candidate for governor of Nagasaki over the weekend. Public support for the DPJ government appears to have fallen below 50. Prime Minister Hatoyama blames the recent scandals for the poor showing and this is likely to increase pressure on DPJ-kingpin Ozawa to resign. It is among his aides that the recent scandal has broken. Attention begins to turn to the yen’s likely behavior into the end of the fiscal year. Last year, the yen strengthened in the first half of March but by mid-April had given it all back plus some. Mitigating these forces may be the stronger appetite foreign investors have shown in recent weeks for Japanese equities. The market is talking about $35 bln (JPY 3.2 tln) of Toshin funds this week with the peak issuance expected Wed.