Yen Strengthens as Ishiba Maintains Leadership
The Japanese yen hovered around 147.5 per dollar on Tuesday after gaining about 1% in the previous session, as investors continued to digest the weekend’s election outcome.
While the ruling coalition lost its majority in the upper house, the result was largely priced in. Crucially, Prime Minister Shigeru Ishiba is expected to stay in office, easing fears of political instability or a sudden resignation.
Ishiba reiterated his commitment to overseeing ongoing tariff talks with the US and managing other key policy matters. Meanwhile, opposition parties are expected to push for increased fiscal stimulus and tax cuts, moves that could weigh on the yen and push government bond yields to multi-year highs.
On the trade front, Japan’s chief negotiator Ryosei Akazawa said Monday he still aims to reach an agreement with the US by the August 1 deadline despite the election setback.
Source: Trading Economics
