The Japanese yen continues to weaken in the aftermath of recent election results in Japan, fueling investor concerns about the country's political stability and economic outlook. This stagnation in policy momentum erodes confidence in the yen.
The ruling coalition's failure to secure a majority complicates the government's ability to implement crucial fiscal and monetary policies, reducing the likelihood of interest rate hikes. The yen may face further pressure if political uncertainty persists.
At the same time, the US dollar could continue to see strength as traders monitor the political developments in the country with the presidential elections approaching. Expectations of a Trump win could push the dollar to the upside.
Traders could react to new data releases this week including job market, GDP and inflation data. This week's BoJ's interest rate decision could attract attention although the central bank is expected to leave its rates unchanged.
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