Japan’s ruling party, the Liberal Democratic Party, will elect its new leader this afternoon (Fri Sep 27th) with the first vote expected after 2pm. While relatively under the radar, the vent could have dramatic consequences for the USDJPY, and thus, local stocks.

Among the nine candidates, the top three ranked in the majority of the polls are – Shigeru Ishiba, Shinjiro Koizumi, and Sanae Takaichi. The bottom line, according to Goldman's Dani Wojdyla, is that the outcome remains a toss-up.

Equity investors remain focused on impact to the market and yen, with acute focus on financials. Conversations with investors suggest that based on who wins, the likely outcome could potentially result in the following: