Yen Hits Three-Month Low Amid Election Uncertainty

The Japanese yen has declined to a three-month low, facing its fourth consecutive weekly loss as uncertainty surrounding Japan's upcoming snap election looms. Polls suggest the ruling Liberal Democratic Party (LDP) may lose its longstanding dominance, which could complicate the Bank of Japan's (BOJ) plans for policy normalization. The yen's drop, currently at 152 per dollar, reflects broader market trends and has raised concerns among Japanese businesses about the economic impact of further depreciation. Meanwhile, the dollar has remained stable, supported by restrained expectations of aggressive Federal Reserve rate cuts and growing political speculation in the U.S. As the BOJ prepares for its next meeting on October 30-31, traders are alert for potential interventions from Japanese authorities to stabilize the currency. The political instability and economic factors contribute to fears that any rate hikes could be delayed well into next year.