Forex News: Yen Falls Amid Ongoing Japan Political Concerns

Yen Falls Amid Ongoing Japan Political Concerns

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Thursday, as worries about Japan's fiscal health persist.

Japanese Prime Minister, Sanae Takaichi, is anticipated to announce measures to boost the country's economy following an overwhelming win in a general election earlier this month.

Furthermore, PM Takaichi is under further pressure to provide additional stimulus due to the country's weak GDP growth figures.

The International Monetary Fund (IMF) cautioned against lowering the consumption tax, claiming that doing so would increase Japan's debt risks and reduce its fiscal space.

However, investors appear to be certain that Takaichi's initiatives will strengthen the economy and encourage the Bank of Japan (BoJ) to continue its policy-tightening course.

Asian markets traded higher, primarily boosted by substantial strength among technology stocks, which mirrored their peers on the tech-heavy Nasdaq as concerns eased over AI-related disruptions. Energy stocks also led the charge as oil prices surged.

Trading volumes were light, with markets in China, Hong Kong and Taiwan remaining closed for the Lunar New Year holidays.

In economic news, data from the Cabinet Office showed that the value of core machinery orders in Japan was up a seasonally adjusted 19.1 percent on month in December, coming in at 1,052.5 billion yen. That beat forecasts for an increase of 5.1 percent following the 11.0 percent contraction in November.

On a yearly basis, orders jumped 16.8 percent - again exceeding expectations for a gain of 3.9 percent after sinking 6.4 percent in the previous month. For the fourth quarter of 2025, orders were up 7.9 percent on quarter and 8.1 percent on year. For the first quarter of 2026, orders are seen lower by 4.5 percent on quarter but up 2.2 percent on year. Total orders surged 23.8 percent on month and 40.1 percent on year to 4,148.1 billion yen. In the Asian trading today, the yen fell to a 9-day low of 155.34 against the U.S. dollar and a 2-day low of 209.48 against the pound, from yesterday's closing quotes of 154.83 and 208.94, respectively. If the yen extends its downtrend, it is likely to find support around 159.00 against the greenback and 211.00 against the pound.

Against the euro and the Swiss franc, the yen dropped to 8-day lows of 183.16 and 200.95 from Wednesday's closing quotes of 182.28 and 200.27, respectively. The yen may test resistance around 187.00 against the euro and 204.00 against the franc.

Against the Australia and the Canadian dollars, the yen slid to a 9-day low of 109.70 and an 8-day low of 113.39 from yesterday's closing quotes of 109.05 and 113.05, respectively. The next possible downside target for the yen is seen around 110.00 against the aussie and 115.00 against the loonie.

The yen edged down to 92.75 against the NZ dollar, from yesterday's closing value of 92.35. On the downside, 95.00 is seen as the next support level for the yen.

Looking ahead, U.S. and Canada trade data for December, Canada new housing price index for January, U.S. weekly jobless claims data, U.S. Philadelphia Fed manufacturing index for February, U.S. wholesale inventories for December, U.S. pending home sales data for January, U.S. Consumer Board's leading index for December and U.S. EIA crude oil data are slated for release in the New York session.

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