MUFG analysts Lin Li, Michael Wan, and Lloyd Chan observe that Japan’s upcoming February 8 election is intensifying the Yen’s decline. Following a short-lived recovery to 152, USD/JPY is once again approaching the 160 level. With Prime Minister Takaichi’s coalition likely to maintain its majority, MUFG suggests that market expectations for increased fiscal spending could rise. This fiscal outlook is expected to drive both USD/JPY and long-dated JGB yields higher.
USD/JPY: Yen Remains Under Pressure Amid Election Uncertainties – MUFG
