The Japanese yen is set for its strongest weekly rise in over a year after Prime Minister Sanae Takaichi’s election victory eased fiscal concerns.
The currency has surged 2.7% this week against the dollar, marking its biggest advance since November 2024.
Against the euro, the yen is up 2.3% for the week, while gaining 2.7% versus the pound.
Markets had initially expected a weaker yen if Takaichi secured a strong mandate, but political clarity instead triggered short-yen unwinding.
Safe-haven flows also supported the currency, as equity volatility pushed investors toward the yen and Swiss franc.
Japanese stocks and government bonds have rallied since the vote, signaling confidence in Takaichi’s pledge of responsible fiscal policy without new debt issuance.
In broader markets, currencies traded cautiously ahead of U.S. inflation data, with traders pricing in two Federal Reserve rate cuts in 2026.
The dollar is headed for a weekly loss, pressured by mixed labor signals, while the Swiss franc strengthened as a preferred safe-haven currency.
