FX.co ★ Yen Falls After LDP’s Landslide Win

On Monday, the Japanese yen depreciated beyond 157.5 per dollar, reaching a two-week low, following a landmark victory by the ruling Liberal Democratic Party (LDP), led by Prime Minister Sanae Takaichi. The party achieved a two-thirds supermajority in the lower house, solidifying Takaichi's mandate from the snap election to implement expansionary fiscal policies. This approach could apply further downward pressure on the yen and Japanese government bonds while potentially bolstering equities. According to data from public broadcaster NHK, Takaichi’s coalition captured 352 out of 465 seats in the House of Representatives, with the LDP alone securing a majority with 316 seats. This outcome has heightened expectations for more relaxed fiscal measures and possible tax cuts, causing concern in Japanese financial markets over the burgeoning debt load. Additionally, Takaichi is anticipated to promote a conservative agenda, which may include stricter immigration controls and more rigorous land-ownership regulations.