FX.co ★ Yen Weakens on Stimulus Expectations

The Japanese yen edged closer to 154 per dollar on Monday, approaching its lowest level in nine months. This movement is largely driven by anticipations of a substantial stimulus package under the new administration. Prime Minister Sanae Takaichi's leadership is expected to advocate for policies that both stimulate significant economic growth and maintain price stability. A draft plan suggests that the central bank may be encouraged to support these objectives. The anticipated package, slated for completion by November 21, aims to incorporate tax reductions and investment incentives for 17 pivotal industries. In parallel, the Bank of Japan’s October Summary of Opinions underscores the importance policymakers place on steady wage growth for future policy determinations. However, the timing of the BOJ’s next interest rate increase remains uncertain, with market speculation suggesting a possible adjustment in December.