In Japan’s upper house election, the ruling party lost its majority, as expected, but it was not a big defeat. Because of that, people bought yen, and the dollar/yen rate dropped to around 148 yen. After that, it went back up slightly to the mid-148 yen level.
However, in the European market, U.S. long-term interest rates started to go down. This caused the dollar/yen rate to fall again. U.S. Treasury Secretary Bessent said, “If inflation goes down, we should lower interest rates.” During New York trading hours, the dollar/yen fell further to 147.09 yen.
Because the ruling party lost its majority, there are now worries that the opposition might push for tax cuts. These worries about government finances may lead to selling yen. Some people think that after the recent buying back of yen finishes, the yen may weaken again.
Also, there is a change in the short-term trend, shown by a signal called the “Ichimoku Cloud twist.” If we see the drop in yen from 143 to 149 yen as a big move, then a correction to around 146 yen (the 50% Fibonacci level) is possible.
Expected USD/JPY price range: 146.10 – 147.80 yen
Note: This information does not guarantee profits. Please make your own decisions when trading.