Yen's Resilience Amid Political Shifts in Japan

The Japanese yen showed firmness on Monday despite Japan's ruling coalition losing its upper house majority, which has roused fears of policy stalemate in the world's fourth-largest economy. Markets braced for upcoming U.S. tariff negotiation deadlines while Japanese exchanges remained closed.

The yen advanced to 148.46 per dollar, holding just above the last week's lows, amid investor anxiety over Japan's fiscal prospects. Prime Minister Shigeru Ishiba's Liberal Democratic Party fell short in securing a majority, returning only 47 seats out of the 248 in an election where half the seats were contested.

This political shakeup, while not enough to topple Ishiba's administration, adds pressure on the beleaguered leader who is also dealing with the fallout from losing the lower house in October. With ongoing U.S. tariff discussions and possible leadership changes, investors' fears of a negative impact on Japanese assets remain.