The yen is the early loser in today's FX trade as the slump that started with the LDP selection of Sanae Takaichi continues. There was initially a sharp drop in the yen (i.e. a rise in USD/JPY) after the October 6 selection but that tempered as she initially struggled to form a government followed by some generalized risk aversion.
The risk mood has since stabilized and Takaichi forged a government. Now the market is focused on her priorities around boosting fiscal spending while restraining the BOJ from hiking rates.
I suspect we are on our way to a test of the October high.
