The Japanese Yen (JPY) remains under pressure, with USD/JPY pushing toward the 152.00 mark on Tuesday, up 0.80% for the day. The pair’s strength reflects a mix of persistent U.S. Dollar (USD) momentum and investor skepticism surrounding Japan’s new government led by Prime Minister Sanae Takaichi.
New Cabinet, Familiar Concerns
Takaichi, officially elected Prime Minister with 237 votes in the Lower House, revealed her cabinet lineup earlier in the day. One notable appointment was Satsuki Katayama as the new Finance Minister—a move that initially offered some hope for the Yen. Katayama, a former finance ministry official, has been vocal in the past about concerns over excessive Yen weakness. She believes the currency’s fundamentals support a much stronger exchange rate, ideally in the 120–130 per USD range.
However, that optimism has been short-lived in the markets. Despite Katayama’s stance, the broader outlook for meaningful currency support remains clouded. Takaichi’s coalition still lacks a simple majority in parliament, casting doubt on the government’s ability to push through significant economic reforms or fiscal adjustments.
A Commerzbank analyst commented, “The new administration may lean toward a business-friendly agenda, but it is unlikely to advocate for further Yen depreciation. We expect USD/JPY to trade sideways from here.”
USD Strength: Trade Hopes and Shutdown Optimism
On the other side of the pair, the U.S. Dollar continues to enjoy broad support. Investors are growing increasingly hopeful ahead of the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping, with expectations rising that the summit could ease trade tensions.
Adding to the positive sentiment, White House economic advisor Kevin Hassett said on Monday that the U.S. federal government shutdown could be resolved “sometime this week.” The resolution could pave the way for a more data-driven Federal
