Yen Wavers Amid Japanese Election Uncertainty

The Japanese yen faced its fourth consecutive weekly decline amidst political uncertainties surrounding Japan's upcoming elections. The yen's weakness and the ruling party's possible loss could impact the Bank of Japan's policy plans. Globally, the dollar experienced a pause after recent highs, affecting other currencies.

The Japanese yen continued its struggle near a three-month low on Friday, marking a fourth straight weekly decline as political uncertainty from Japan's weekend election loomed. The outcome is expected to challenge the Bank of Japan's efforts toward policy normalization.

Globally, the dollar retreated from recent peaks, reflecting lower U.S. Treasury yields but sustaining a fourth consecutive week of gains. With the ruling Liberal Democratic Party facing potential losses, according to polls, political instability could disrupt the BOJ's current rate hike trajectory.

In response, the yen saw a 1.5% weekly loss, with traders vigilant for possible interventions by Japanese authorities. A bilateral meeting between Japan's Finance Minister and the U.S. Treasury Secretary highlighted concerns over currency exchange rates.

(With inputs from agencies.)