FX.co ★ Japanese Yen Weakens to 1-Year Low

The Japanese yen fell past 158 against the dollar on Tuesday, reaching its weakest point in a year. This decline comes amid growing political uncertainty surrounding speculation that Prime Minister Sanae Takaichi might dissolve parliament as early as next month. Takaichi is anticipated to use her strong public support to push forward expansionary fiscal policies. In a meeting on the sidelines of this week's multilateral finance ministers’ conference, Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent expressed concerns about the yen's "one-sided depreciation." Katayama also highlighted issues with China's export restrictions on materials essential to Japan’s military, including critical minerals. In terms of monetary policy, there is a division in the market regarding the timing of the next interest rate hike by the Bank of Japan, as recent economic data continue to show mixed indicators.