Yen Tightens Grip Amid Japan's Political Turmoil
The Japanese yen strengthened despite political turbulence as Japan's ruling coalition lost its majority in the upper house. Prime Minister Ishiba's position is uncertain while investors focus on U.S.-Japan tariff negotiations. Increased political fragility may limit Bank of Japan's monetary policy options amidst potential U.S. tariff changes.

The yen strengthened on Monday in response to Japan's ruling coalition losing its majority in the upper house. The currency moved 0.8% higher to 147.65 per dollar, marking a recovery from last week's low, even as markets showed unease ahead of U.S. tariff negotiations.
Prime Minister Shigeru Ishiba's Liberal Democratic Party secured 47 seats, falling short of a necessary majority and casting doubt on his leadership. Market observers believe prolonged political instability could negatively impact the yen and Japanese assets.
The election results arrive amid unresolved U.S.-Japan trade talks with an August 1 deadline looming. The situation could restrict the Bank of Japan from tightening monetary policy as the global economic landscape grows increasingly volatile.
(With inputs from agencies.)