Forex News: Yen Slides Amid Japan Fiscal And Political Uncertainty

Yen Slides Amid Japan Fiscal And Political Uncertainty

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Thursday, due to concerns about Japan's fiscal health and political uncertainty.

Sanae Takaichi, the prime minister of Japan, announced plans to suspend the nation's consumption tax in the event that her Liberal Democratic Party wins the election on February 8.

Over the weekend, Takaichi issued a warning, stating that authorities are prepared to take appropriate action against very anomalous and speculative market movements.

Meanwhile, the Bank of Japan's (BoJ) hawkish stance and speculation that Japanese authorities will intervene to stop further declines in the native currency proved to be major factors supporting the JPY.

In economic news, data from the Cabinet Office showed that Japan's consumer sentiment improved in January to the highest level in nearly two years. The seasonally adjusted consumer confidence index rose to 37.9 in January from 37.2 in December. Meanwhile, economists had forecast the index to rise to 38.0.

Further, this was the highest reading since April 2024, when it was 38.2.

Asian stocks ended mixed, recovering some lost ground after a sluggish start as U.S.-Iran tensions escalated and tech earnings proved to be a mixed bag.

U.S. President Donald Trump has warned Iran that "time is running out" to negotiate a deal on its nuclear program following the steady build-up of U.S. military forces in the Gulf.

In response, Iran's Foreign Minister Abbas Araghchi said the country's armed forces were ready "with their fingers on the trigger" to "immediately and powerfully respond" to any aggression by land or sea.

Meanwhile, all eyes are now on Apple after Microsoft's quarterly results highlighted rising costs linked to heavy AI investment.

In the Asian trading today, the yen fell to a 2-day low of 183.74 against the euro, from yesterday's closing value of 183.39. The yen is likely to find support around the 186.00 region.

Against the pound and the Swiss franc, the yen dropped to 6-day lows of 212.17 and 200.14 from Wednesday's closing quotes of 211.83 and 199.66, respectively. If the yen extends its downtrend, it is likely to find support around 216.00 against the pound and 201.00 against the franc.

Against the U.S. dollar, the yen edged down to 153.44 from yesterday's closing value of 153.41. The next possible downside target for the yen is seen around the 160.00 region.

Looking ahead, U.S. and Canada trade data for November, U.S. weekly jobless claims data, U.S. factory orders and wholesale inventories for November are slated for release in the New York session.

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