Yen Rises After Japanese PM Takaichi's Election Victory

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Wednesday, following Prime Minister Sanae Takaichi's overwhelming election victory and foreign inflows into Japanese stocks have raised demand for the Japanese yen (JPY).

The ruling Liberal Democratic Party (LDP), led by Japanese PM Takaichi, won a resounding victory in Sunday's lower house election, eliminating political uncertainty at home and opening the door for additional fiscal stimulus.

According to investors, Takaichi's expansionary measures are expected to stimulate the economy and encourage the Bank of Japan (BoJ) to maintain its hawkish posture.

Amid concerns about intervention, the JPY is nevertheless supported by prospects for additional BoJ interest rate hikes.

Asian stock markets traded higher, with the Japanese market closed for a holiday, and as traders seemed reluctant to make significant moves ahead of the release of the closely watched US monthly jobs report later in the day that could influence the US Fed's outlook for interest rates.

In the Asian trading today, the yen rose to nearly a 2-month high of 208.99 against the pound and an 8-day high of 199.75 against the Swiss franc, from yesterday's closing quotes of 210.63 and 201.00, respectively. If the yen extends its uptrend, it is likely to find resistance around 206.00 against the pound and 197.00 against the franc.

Against the euro and the U.S. dollar, the yen advanced to near 2-week highs of 182.22 and 152.80 from Tuesday's closing quotes of 183.64 and 154.39, respectively. The yen is likely to find resistance around 179.00 against the euro and 151.00 against the greenback.

The yen advanced to a 5-day high of 108.70 against the Australian dollar, from yesterday's closing value of 109.25. On the upside, 106.00 is seen as the next resistance level for the yen.

Against the New Zealand and the Canadian dollars, the yen climbed to near 2-week highs of 92.63 and 113.05 from Tuesday's closing quotes of 93.30 and 113.92, respectively. The next possible upside target for the yen is seen around 106.00 against the aussie, 90.00 against the kiwi and 112.00 against the loonie.

Looking ahead, Canada building permits for December, U.S. MBA mortgage approvals data, U.S. jobs data for January, and U.S. EIA crude oil data are slated for release in the New York session.

Japanese stock markets are closed in observance of National Founding Day holiday.