The effect of the Victory by Japan's Opposition Party in a Historic National Election

The morning after a historic victory by Japan's opposition party in the national election and yes pressure is already mounting on a Monday morning for quick, definitive action to resolve a host of problems faced by the country, with, of course, reviving the country's economy at the top of the list.

Japan is in its worst economic slump ever since World War II. It is caught in deflation and with the unemployment rate at its record high. The dissatisfaction of country wide voters caused an expected turnaround which led to a landslide victory for the opposition.

With the victory by the Japan's Opposition party, Japan’s Nikkei 225 stock average initially rose as much as 1.5 per cent to 10,767, its highest level in over 10 months. A strong surge in the value of YEN could be seen across majors YEN crosses such as USDJPY, EURJPY, GBPJPY, AUDJPY and CHFJPY. The strong surges occurs at the opening of the Tokyo Market around 0000GMT 31 August 2009. Surge of upto 100 pips could be seen.

Japan's Nikkei 225 stock average gave up the early gains and slipped 0.4 per cent to 10,497.19 by midday. The strengthening of the YEN lasted only around 3 hours and starts to lose its strength after midday too.

So, how will Japan's fare with its government? Will its economy be revived? How will the new Japan's government affect the world's eceonomy? Let's take a back seat now and observed how the trend goes..