FX.co ★ Yen Holds Decline Ahead of Elections

The Japanese yen lingered near the 157 per dollar mark on Thursday, marking its weakest position in nearly two weeks and reflecting a decline of over 1% this week, as the nation approaches the lower house elections scheduled for the weekend. Prime Minister Takaichi's ruling Liberal Democratic Party (LDP) is anticipated to secure additional seats in the election. She is seeking voter approval for increased government spending and other policy objectives. Since Takaichi assumed office, both Japanese bonds and the yen have encountered pressure due to her advocacy for expansive fiscal policies, which have raised concerns regarding Japan's debt sustainability. Investors are also turning their attention to Japan's GDP report for the fourth quarter, set to be released next week, with expectations of a recovery following a significant contraction in the previous quarter. Recently, Takaichi indicated that a weaker yen might be advantageous for exporters, though she later clarified that her remarks were intended to endorse an economy adaptable to currency fluctuations. The yen had surged by as much as 4.5% by late January amid rumors of a potential US-Japan collaborative currency intervention, but has since relinquished more than half of those gains.