The Japanese Yen fell in Asian trading on Thursday against a basket of major and minor currencies, extending its losses for the fifth consecutive day against the US dollar and recording its lowest level in two weeks, under pressure from rising speculation about the outcome of Japans general election due this weekend.

According to the latest opinion polls in Tokyo, the ruling coalition led by Prime Minister Sanae Takaichi is strongly ahead to secure control of the House of Representatives, which would give the new government a green light to move forward with expansionary plans to stimulate the economy.

Price Overview

Japanese yen exchange rate today: The dollar rose against the yen by 0.1% to 156.98, the highest level since January 23, from an opening level of 156.81, and recorded a session low at 156.68.

The yen ended Wednesday trading down by 0.7% against the dollar, marking its fourth consecutive daily loss, driven by election-related speculation.

Japanese Elections

Global markets are turning their attention to Japan ahead of the early general election scheduled for February 8, as Prime Minister Sanae Takaichi seeks voter support for higher spending, tax cuts, and a new security strategy expected to accelerate the strengthening of the countrys defense capabilities.

Opinion Polls

The latest polls indicate a sweeping lead for the ruling Liberal Democratic Party led by Sanae Takaichi, boosting her chances of forming a strong government after the election.

Surveys by Asahi newspaper and Kyodo News suggest the ruling coalition is heading for a decisive victory, with the Liberal Democratic Party expected to exceed the absolute majority threshold of 233 seats, and the coalition with partners potentially reaching around 300 seats out of 465.

Takaichi continues to maintain solid popularity, with recent polls showing government approval ratings between 57% and 64%. Her support is especially strong among younger voters aged 1829, where approval in some surveys approaches 90%.

Sanae Takaichi

Japanese Prime Minister Sanae Takaichi said on Saturday that yen weakness has positive aspects, in remarks that appeared to contrast with repeated warnings from the Ministry of Finance about possible intervention to support the currency.

During a campaign speech ahead of next weeks election, Takaichi said that despite criticism of the weak yen, it represents a valuable opportunity for export sectors, from food industries to automobiles, as the weaker currency has acted as a buffer against US tariffs and provided tangible support to the economy.

Japanese Interest Rates

Market pricing for a quarter-point rate hike by the Bank of Japan at the March meeting currently stands below 10%.

To reprice those expectations, investors are waiting for more data on inflation, unemployment, and wages in Japan.

Outlook for the Japanese Yen

Carol Kong, currency strategist at Commonwealth Bank of Australia, said that a strong performance by the Liberal Democratic Party would encourage Takaichi to push ahead with stimulus plans, increasing the risk of a heavier government debt burden and weighing negatively on Japanese government bonds and the yen.