• USD/JPY edged higher, but gains were capped as traders remained wary of intervention, with election risks stoking fears of more fiscal stimulus .
• Takaichi’s plan to dissolve the lower house and call a snap election has fueled speculation, triggering a recent selloff in the yen and Japanese government bonds.
•Early election fears have raised fiscal concerns over Japan’s heavy debt, pushing the yen toward intervention levels and complicating the Bank of Japan’s rate outlook.
•Earlier this week, Finance Minister Satsuki Katayama said she and U.S. Treasury Secretary Scott Bessent discussed concerns over the yen’s “one-sided depreciation” during a bilateral meeting..
• The yen has fallen nearly 5% against the dollar since Sanae Takaichi became prime minister in October, as investors worry about her spending plans.
• Immediate resistance is located at 159.25(23.6%fib), any close above will push the pair towards 160.00 (Psychological level).
• Support is seen at 158.09(Daily low) and break below could take the pair towards 156.87 (38.2%fib)
Recommendation: Good to buy around 158.40, with stop loss of 157.50 and target price of 159.50
