Yen set for steep monthly drop

The Japanese yen hovered near nine-month lows around 154 per dollar on Friday and was on track for a sharp 4% monthly decline, pressured by the election of Prime Minister Sanae Takaichi, who favors expansionary fiscal measures and loose monetary policy.

The Bank of Japan also kept rates unchanged this month, with Governor Kazuo Ueda cautioning that global trade policies could slow growth and hurt corporate profits.

Meanwhile, new Finance Minister Satsuki Katayama clarified that she no longer stands by her March comments suggesting the yen’s fair value is around 120–130 per dollar, citing her current role overseeing currency policy.

Recent data also showed Tokyo’s core inflation rose more than expected in October, complicating the domestic policy outlook.

Externally, the yen weakened further as a stronger dollar gained support from reduced expectations of additional Federal Reserve rate cuts.