Focus Turns from DPJ Victory to National Strategy Bureau

After a quick 207 points jump at the opening after the Democratic Party of Japan's historic victory, the Nikkei 225 quickly turned minus as the yen rose to JPY92/USD and investor attention quickly turned to the DPJ's first 100 days.

The current Aso administration's term officially lasts until September 30, while the DPJ is expected to announce their choice for Prime Minister and a new cabinet by September 14. The DPJ has stated they will be forming a National Strategy Bureau. Tasked with crafting key national policies including budget guidelines and a basic foreign policy framework, the National Stategy Bureau could become the major political force in the new administration. Consequently, investor attention could well focus on when and how the new bureau takes over the reigns of power.

DPJ party head Yukio Hateyama plans to name all members of the new Bureau after he is elected prime minister. The administrative order/legislation to clear the way for the new Bureau could come in October at the earliest, leaving two months of uncertainty about the new Administration.