MUFG Financial institution analysts Lin Li, Michael Wan, and Lloyd Chan notice that Japan’s 8 February election is reinforcing weak point within the Japanese Yen, with USD/JPY drifting again towards 160 after a short correction. Native media recommend Prime Minister Takaichi’s coalition might safe a lower-house majority, which MUFG warns might broaden fiscal spending expectations and hold upward stress on USD/JPY and long-end JGB yields.
Japanese politics weigh on Yen
“Japan’s political backdrop is reinforcing downward stress on the yen as USDJPY drifts again towards 160 after its transient correction to 152.”
“Native studies point out Prime Minister Takaichi’s ruling coalition is on monitor to safe a lower-house majority, supported by her sturdy approval scores since taking workplace in October.”
“This is able to nonetheless probably create issues over Japan’s fiscal self-discipline because the market might anticipate elevated authorities spending, which can gasoline upward stress on USD/JPY and long-end JGB yields.”
(This text was created with the assistance of an Synthetic Intelligence device and reviewed by an editor.)
