31.10.202502:16:23UTC+00Yen Set for Steep Monthly Drop

The Japanese yen lingered near its nine-month low, roughly 154 per dollar, last Friday. It appeared set to mark a significant monthly decline of 4%, influenced by the election of Prime Minister Sanae Takaichi, who advocates for expansionary fiscal policies and a loose monetary approach. The Bank of Japan has also maintained its interest rates this month. Governor Kazuo Ueda has issued a warning that global trade policies might hinder growth and diminish corporate earnings. In parallel, Finance Minister Satsuki Katayama has retracted her previous statement from March that suggested the yen's fair value was between 120–130 per dollar, emphasizing her current responsibilities in overseeing currency policy. Adding to the complexity, data indicated that Tokyo's core inflation exceeded expectations in October, presenting additional challenges for domestic policy decisions. On the international front, the yen faced further depreciation as the strengthened U.S. dollar found bolstered support, given the reduced anticipation of further Federal Reserve interest rate cuts.