Group 1 - The upcoming election for the president of Japan's ruling Liberal Democratic Party (LDP) will focus on five main candidates, with former Secretary-General Toshimitsu Motegi officially announcing his candidacy [1] - Current Chief Cabinet Secretary Yoshihide Suga, Minister of Agriculture, Forestry and Fisheries Yoshikazu Koizumi, former Minister for Economic Security Sanae Takaichi, and Takashi Kobayashi have also confirmed their intention to run, with formal announcements expected soon [1] - The election is set to take place on October 4, following the announcement of the election on September 22, after the resignation of current LDP president and Prime Minister Shigeru Ishiba [1] Group 2 - A recent poll indicates that Sanae Takaichi leads with a support rate of 28%, followed by Yoshikazu Koizumi at 22.5% and Yoshihide Suga at 11.4% [1] - Yoshihide Suga's position as a key cabinet member may hinder his ability to declare his candidacy early, as he is seen as a core supporter of the current Prime Minister [1] - The election will not only address rising prices but also the challenge of how the LDP and its coalition partner Komeito can cooperate with opposition parties in a minority government situation [2]

Group 1 - S&P Global indicates that recent tariff measures in the U.S. may exacerbate inflation pressures, but the overall consumer price increase in Q2 remained below 3.0% [1] - Goldman Sachs reports that U.S. companies have borne most of the costs of tariffs, with 64% of the burden falling on them, while consumers and foreign exporters bear 22% and 14%, respectively [2] - If recent tariffs follow the previous cost-shifting pattern, consumer burden could rise to 67%, while corporate burden may drop below 10% [2] Group 2 - Mitsubishi UFJ forecasts that emerging Asian currencies may benefit from a weaker dollar in the second half of the year, particularly those with high domestic market-driven economies [1][2] - The potential for a ceasefire in the Russia-Ukraine conflict could positively impact the euro, especially against the dollar, yen, and Swiss franc [4] - UBS highlights increased political uncertainty in Japan due to the ruling party's election losses, which may affect the timing of monetary policy changes [4]

Core Viewpoint - The Japanese yen strengthened following the results of the Senate elections, but the outlook remains uncertain due to tariffs and political instability [1] Group 1: Election Results and Market Reaction - The ruling coalition in Japan lost its majority in the Senate elections, leading to a rise in the yen to 148.46 against the dollar, although it remains close to a three-and-a-half-month low [1] - The ruling coalition, consisting of the Liberal Democratic Party and Komeito, failed to secure a majority in both the recent Senate elections and the previous House of Representatives elections, resulting in a minority government [1] - Market reactions to the election results were muted, as investors may have anticipated a worse outcome for the ruling coalition [1] Group 2: Political Implications and Trade Negotiations - The election results come at a critical time as Japan seeks to finalize a tariff agreement with the U.S. by the August 1 deadline [1] - Analysts suggest that if Prime Minister Shigeru Ishiba resigns, it could trigger political turmoil, leading to potential sell-offs of Japanese stocks and the yen by foreign investors [1] - There is skepticism regarding the yen's ability to maintain its strength, given the long-term political uncertainty affecting Japanese assets [1]