Forex News: Yen Slides Amid Japan's Political Concerns

Yen Slides Amid Japan's Political Concerns

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Monday, due to the Bank of Japan's or BoJ uncertainty and reports that Japan's Takaichi would hold an early election.

Due to the growing Japan-China split and the uncertainty around the Bank of Japan's (BoJ) upcoming interest rate hike, the Japanese yen (JPY) continues to perform quite poorly.

In reality, China has started limiting exports of dual-use items, including some rare earth elements, to Japan after intensifying its conflict with Japan last week.

The ban comes after a political dispute over Taiwan and increased supply-chain risk for Japanese manufacturers.

Some media reported that Sanae Takaichi, the prime minister of Japan, was thinking of conducting an early legislative election in the first part of February.

Meanwhile, major stock markets in Asia traded higher, as a rally in Chinese AI stocks boosted sentiment. The global geopolitical situation as well as the escalation in tensions between the White House and the Federal Reserve limited gains. Equity markets in Japan are closed for a holiday.

In the Asian trading today, the yen fell to a 17-year low of 212.40 against the pound, nearly a 3-week low of 184.49 against the euro and a 1-week low of 198.23 against the Swiss franc, from yesterday's closing quotes of 211.61, 183.75 and 197.03, respectively. If the yen extends its downtrend, it is likely to find support around 214.00 against the pound, 185.00 against the euro and 198.00 against the franc.

Against the U.S. dollar, the yen edged down to 158.18 from an early high of 157.52. The yen weakened earlier to a 1-year low of 158.20 against the greenback. On the downside, 159.00 is seen as the next support level for the yen.

Looking ahead, markets in Japan are closed in observance of Coming of Age (Adults') Day holiday.

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