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Yen Strengthens as Intervention Risk Trips up Takaichi Trade
Takaichi’s supermajority win boosts expectations for fiscal stimulus and policy clarity, lifting Japanese equities to record highs and strengthening the yen by up to 0.7%, analysts said.
- On Monday, the yen strengthened in Asian trading after Japanese Prime Minister Sanae Takaichi swept to victory in Sunday's election, rising as much as 0.7% and trading about 0.5% firmer at 156.43 per dollar .
- Following Sunday's vote, the Liberal Democratic Party and Japan Innovation Party secured a two-thirds supermajority, enabling overrides of the upper chamber, with an extraordinary National Diet session expected this month to begin budget deliberations.
- Markets also showed calmer bond and currency moves as Japanese equities surged to 57,337.07, with longer-tenor government bond yields pulling back this year.
- Markets repriced U.S. policy odds as Fed funds futures now price a 19.9% probability of a 25-basis-point cut at the Federal Reserve meeting on March 18, and Takaichi is set to meet Donald Trump at the White House on March 19 to discuss a $550 billion package.
- Looking ahead, analysts warn fiscal policy expansion could strain finances and inflation, while currency intervention risk and limited fiscal room may cap yen gains and revive volatility.
11 Articles
11 Articles
Yen strengthens after Japanese election, dollar weakens | Honolulu Star-Advertiser
NEW YORK/LONDON >> The yen strengthened today after Japanese Prime Minister Sanae Takaichi’s election victory, reversing six consecutive days of losses, and the dollar fell against other major currencies following a report that Chinese regulators have advised financial institutions to curb their exposure to U.S. Treasury bonds.
Asian forex flat, yen firms
The yen’s USD/JPY pair dropped 0.2% to 156.87 yen Most Asian currencies moved in a tight range on Monday, while the yen firmed slightly after the country’s finance ministry ramped up its warnings of currency market intervention. But the yen still nursed recent losses on concerns over stretched government fiscal spending, with said concerns set to persist after Prime Minister Sanae Takaichi clocked a landslide victory in lower house elections hel…
USD/JPY Reacts to Political News: Budget Line Will Be Soft - ActionForex
USD/JPY is down to 156.73 on Monday. The Japanese yen had earlier dropped to its lowest levels in almost two weeks after a landslide victory for Japan’s ruling Liberal Democratic Party in early elections to the lower house of parliament. The coalition is led by Prime Minister Sanae Takaichi. However, demand for the yen returned […] The post USD/JPY Reacts to Political News: Budget Line Will Be Soft appeared first on ActionForex.
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