GBP/JPY traders getting set for the UK elections

Currently, GBP/JPY is trading at 142.34, up 0.01% on the day, having posted a daily high at 142.78 and low at 141.75.

Britain Elects final poll of polls: Con: 43.7% (+5.9) Lab: 36.1% (+4.9)

GBP/JPY has moved into a sideways chop as we await the results of the UK elections today. The price action has been dominated by polls and sentiment this month. For the yen, the early Asian session release of disappointing Q1 GDP had no material impact on JPY, though it was shortly followed by a knee-jerk BoJ-driven rally with headlines hinting to a potential recalibration of communication on policy normalization, noted analysts at Scotiabank. "A swift reversal roughly coincided with the European open, delivering steady JPY weakness on the basis of broad-based risk appetite."

Comey was the next risk in the US session after the ECB delivered a steady hand and rhetoric with a little surprise in its inflation forecast. Comey was not forthcoming openly when questioned directly:

"Do you believe Donald Trump colluded with Russia?"
Comey: "That is a question I don't think I should answer in an open setting. That's a question that will be answered by the investigation." 
Te price now depends on the election results and cable has trimmed longs into the US shift with a slight bid in the pound here as we hand over to early Asia. 

What to expect from the UK elections and possible scenarios?

Conservative victory with Absolute Majority (Scenario 1) - A Conservative victory with an absolute majority should be supportive initially for the pound. Stock markets would be relieved on the lower corporation tax outlook and a risk-on environment could be the expected outcome. However, with a focus on Brexit and PM May's hardline - "No deal is better than a bad deal" - approach to the negotiations, a hard Brexit outlook could equate to a bearish scenario to the pound eventually - (Note: Remain cautious of a 'buy the rumour sell the fact' trade - a Conservative victory is virtually priced in).

Conservative victory without Absolute Majority (Scenario 2) - With the narrowing of the polls and a trend that has been continuing, the possibility of a hung parliament should not be ruled out, (When no party has won enough seats to have a majority in the House of Commons). Such an outcome could be highly bearish for the pound due to the uncertainty for markets to deal with. However, in a hung parliament, the incumbent prime minister stays in office until it is decided who will attempt to form a new government - this could support the pound after an initial sell-off. (Note: A hung parliament does NOT necessarily mean a coalition government). 

Laborist victory (Scenario 3) - A balanced outcome for the pound with initial volatility on the basis of Labour’s manifesto. Initially, a lower pound could be the immediate outcome bias due to increased uncertainty and a reduction of inflows. However, a Labour victory should mean a softer Brexit outlook and austerity would be removed, (Fiscal easing lifting growth and inflation expectations). Higher real yields may offset the initial weakness in the pound.

GBP/JPY levels discussed at 1min and 58 secs in the following special Super Thursday and UK elections video: