Japanese elections put pressure on yen — Bloomberg

Bloomberg strategists warn that the yen could weaken further if Prime Minister Shigeru Ishiba’s ruling coalition loses its majority in the upper house election on July 20. Polls suggest the Liberal Democratic Party-led bloc may fall short of securing enough seats.

Japan’s fiscal concerns have driven bond yields to multi-year highs, while election uncertainty has pushed the yen to its lowest level since April. On Wednesday, the currency fell to 147.484 per US dollar.

Marito Ueda of SBI Liquidity Market predicts the yen could drop to 152 per dollar if the ruling coalition weakens, while Mizuho’s Shoki Omori sees a worst-case scenario of 155, a level last seen in February.

Meanwhile, United States import tariffs are complicating the Bank of Japan’s policy decisions. Kumiko Ishikawa of Sony Financial Group expects trade negotiations with the US to advance after the election.