Yen's Response to Japan's Political Shake-up

The yen experienced a strengthening following the loss of a majority by Japan's ruling coalition in the upper house elections. Investors were prepared for the political upset and are monitoring ongoing U.S. tariff negotiations.

Despite the yen's rise, it remained close to last week's lows due to concerns over Japan's political and fiscal stability. Prime Minister Shigeru Ishiba faces increased scrutiny after failing to secure a majority.

The timing coincides with pressing tariff talks with the U.S. and adds complexity to Japan's economic landscape, as investor focus also turns to global markets in anticipation of moves by the European Central Bank and Federal Reserve.

(With inputs from agencies.)