FX.co ★ Yen Weakens Toward 8-Month Low

The Japanese yen approached 153 per dollar on Monday, nearing levels not seen since February, as expectations of robust fiscal expansion from the new administration and uncertainties surrounding the Bank of Japan’s policy stance continued to pressure the currency. The yen's sharp decline this month follows the election of Prime Minister Sanae Takaichi, who is anticipated to pursue expansive fiscal policies alongside maintaining an accommodative monetary environment. Speculation suggests she could announce a substantial stimulus package as soon as next month, possibly surpassing the previous year’s 13.9 trillion yen initiative aimed at alleviating inflationary impacts on households. Concurrently, the Bank of Japan is largely forecasted to maintain steady interest rates in its upcoming meeting, although discussions among policymakers could focus on the prerequisites for resuming rate hikes amid diminishing tariff-linked risks. Market participants also anticipate further policy insights from Takaichi's upcoming engagement with US President Donald Trump this week.