FX.co ★ Yen Eases Ahead of LDP Leadership Vote

The Japanese yen weakened to approximately 147.5 against the dollar on Friday, stepping back from its two-week peak as investors anticipated an important leadership election within the ruling party scheduled for this weekend. This vote will determine the next prime minister and influence the direction of fiscal and monetary policy. The Liberal Democratic Party is tasked with selecting a successor to former Prime Minister Shigeru Ishina, who stepped down last month. The discussions are primarily focused on whether to prioritize household relief measures or fiscal discipline. In economic data, Japan's unemployment rate increased to 2.6% in August, marking its highest level in 13 months and surpassing market expectations of 2.4%. There is ongoing uncertainty regarding the timing of further interest rate hikes by the Bank of Japan, amidst a backdrop of mixed economic indicators and global trade challenges. Bank of Japan Governor Kazuo Ueda reiterated on Friday that interest rates will rise if economic growth and inflation progress as anticipated.