The Japanese Yen has plummeted to its weakest point since late July 2024, fueled by political uncertainty following a recent election. The ruling coalition’s loss of its majority in the Lower House has sparked concerns about Japan’s future fiscal and monetary policy direction, further weakening the yen. The widening yield gap between U.S. and Japanese bonds is also contributing to the yen’s decline, as investors seek higher returns in the U.S. dollar. While the Bank of Japan’s upcoming meeting on Thursday is unlikely to see immediate policy changes, the political situation is adding complexity to the BoJ’s future decisions.
