Ella 
USD/JPY surged to a near three-month high, hitting 151.79, helped by a stronger dollar and rising U.S. Treasury yields. Strong U.S. macroeconomic data and demand for safe-haven assets triggered by U.S. election expectations supported the appreciation of the U.S. dollar.
As Japan’s general election approaches this weekend, Japan’s political landscape remains unclear. Preliminary polls show the ruling Liberal Democratic Party is likely to lose its majority, exacerbating concerns about political stability and the future direction of the Bank of Japan’s monetary policy. This political uncertainty further undermines prospects for a renewed strength in the yen against a strong dollar.
The current environment suggests that the Bank of Japan is unlikely to intervene effectively under these conditions. The market expects that any attempt at intervention will be futile in the face of the current strong demand for the dollar. The yen’s fate now depends heavily on the outcome of Japan’s election and the Bank of Japan’s subsequent actions, particularly regarding its interest rate decision.
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