- The Japanese Yen (JPY) falls after gains last week
- Sanae Takaichi, the fiscal dove, is likely the next PM
- The US Dollar (USD) rises versus its major peers
- Trade worries ease and the US shutdown could end this week
The US dollar Japanese yen (USD/JPY) exchange rate is rising on Monday, recovering from losses last week The pair fell -0.36% in the previous week, settling on Friday at 150.64. On Monday at 19:00 UTC, USD/JPY trades +0.11% at 150.81 and traded in a range of 150.28 to 151.20.
The yen is slipping lower as fiscal dove Sanae Takaichi is almost certain to become Japan’s first female prime minister after a key parliamentary vote.
Her expected premiership is backed by a coalition with the right-wing Japan Innovation Party has raised concerns over potential fiscal expansion, which is weighing on demand for the yen.
The market will be watching closely to see what the fiscal plans from the new coalition government look like.
BoJ policymaker Hajime Takata, who voted to hike rates in the September meeting, reiterated his support for resuming rate hikes, limiting the downside in the yen.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.20% at 98.63, after losses last week.
The US dollar is rising against its major peers, easing concerns over US regional banks and an optimism surrounding US-China trade talks.
Concerns over credit risk in US regional banks hit risk sentiment hard last week following worrying earnings from a couple of regional banks. However, more recent earnings have said these appear to be isolated cases rather than a growing trend
Meanwhile, optimism surrounding US-China trade talks at the end of the month is also helping the USD move higher. Over the weekend, Trump confirmed that he would meet with Chinese President Xi Jinping later this month.
Finally, the US government shutdown could end as soon as this week, according to a White House advisor. This would put an end to the data blackout.
