"During the Asian trading session this morning, USD/JPY recorded a corrective move, retreating toward the 156.5-157.0 area after a sequence of six consecutive sessions of gains. The intraday decline reflects a degree of caution among capital flows in the Asian region, as investors tend to take short-term profits following a prolonged rally. This price action bears the characteristics of a sentiment- and timing-driven correction rather than a clear signal of a reversal in the medium- to long-term trend."
"From a broader perspective, USD/JPY continues to maintain its overall upward trend on the weekly and monthly timeframes. Over the most recent trading week, the pair still posted gains of around 1.5-1.6%, while over the past 52 weeks, USD/JPY has risen by approximately 3.2%, trading mainly within a range of 139.88 to 159.46. This indicates that the pullback seen during the Asian session occurred while the broader trend remains intact."
"However, looking beyond the short-term horizon, Japan's political backdrop following the Lower House election is creating a different underlying foundation for the yen. The landslide victory of Sanae Takaichi and the Liberal Democratic Party, securing approximately 328 out of 465 seats, together with an alliance with the Japan Innovation Party that gives the ruling bloc control of more than two-thirds of the Lower House, has provided strong political backing for the new government. This outcome enables the government to pass fiscal policies with relative ease and, if necessary, override the Upper House."
USD/JPY pulled back to the 156.5-157.0 area in the Asian session after six consecutive sessions of gains as investors took short-term profits. The intraday decline appears driven by sentiment and timing rather than a medium- to long-term trend reversal. The pair remains in an upward trend on weekly and monthly timeframes, with about 1.5-1.6% gains over the most recent week and roughly 3.2% over 52 weeks within a 139.88-159.46 range. Thinner liquidity in the Asian session amplified corrective moves, and recent Lower House election results strengthen political support for fiscal policy in Japan.
Read at London Business News | Londonlovesbusiness.com
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