FX.co ★ Yen Gains as Markets Reverse Takaichi Trade

The Japanese yen appreciated towards the 151 mark against the dollar on Wednesday, marking its second consecutive day of gains. This rise comes as there is growing uncertainty about whether Sanae Takaichi, the leader of the ruling Liberal Democratic Party, will be appointed the next prime minister following the coalition's division with the Komeito party. Takaichi is known for her advocacy of Abenomics-type expansionist policies, which has led to speculation about potential increases in fiscal spending and continuation of a loose monetary policy. These factors typically exert downward pressure on the yen while positively impacting equities. In parallel, opposition parties are engaging in discussions today in an attempt to garner sufficient support to establish a new government. Additionally, the yen has been bolstered by a surge in safe-haven demand, as tensions between the US and China intensify. This follows President Trump's threat of a cooking oil embargo against Beijing in retaliation for China's boycott of soybeans.