Focus on 8 September as LDP members submit responses to decide if the party presidential election should be brought forward. USD/JPY was last at 148.23 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Risk of an earlier LDP election may undermine the JPY

"Earlier, 4 LDP members including Secretary-General Hiroshi Moriyama indicated their intention to step down after the election review report was presented. Report had indicated nine factors on why voters are not supporting the LDP."

"This included the loss of trust brought on by money scandals, measures to deal with higher CPI, etc. It remains unclear if PM Ishiba will resign and if any new leadership will bring about any positive change. The risk of an earlier LDP election may temporarily undermine the JPY and it is likely political-driven JPY depreciation reverses when the domestic house is in order."

"USD/JPY rose sharply to 149.14 yesterday before easing lower. Daily momentum and RSI indicators are not showing a clear bias for now. 2-way risks ahead. Bias to lean against strength. Resistance at 148.80 (200 DMA), 149.20 levels. Support at 147.20 (50 DMA), 146.70 (38.2% fibo retracement of Apr low to Aug high)."