FX.co ★ Yen Slides Further Ahead of Snap Election

The Japanese yen weakened beyond 156 per dollar on Wednesday, marking its fourth consecutive session of decline, reaching a nearly two-week low in anticipation of the upcoming snap lower house election this weekend. Prime Minister Sanae Takaichi's ruling Liberal Democratic Party (LDP) is projected to secure additional seats as she seeks voter support for her proposals of increased government spending, tax reductions, and a new approach to national security. Takaichi's advocacy for expansive fiscal policies following her election has intensified pressure on both Japanese bonds and the yen, fueling concerns about Japan’s fiscal health amid fears of debt-financed expenditures. Over the weekend, Takaichi suggested that a weaker yen could advantage export industries, although she subsequently clarified that her intention was to advocate for an economy resilient to currency fluctuations. The yen had surged by as much as 4.5% in late January amid speculation about a potential US-Japan joint currency intervention, but it has since relinquished more than half of those gains.