JPY: Weakness persists ahead of election – OCBC Bank

💡 DMK Insight

The JPY’s ongoing weakness signals potential volatility ahead of Japan’s February election, and here’s why that’s crucial for traders: With the election looming, uncertainty around fiscal policy is creating a mixed bag for investors. JGB yields are behaving differently, indicating that some traders are betting on a more hawkish stance, while others remain cautious. This divergence can lead to significant price swings in the JPY, especially if the election results deviate from market expectations. Traders should keep an eye on the 10-year JGB yield as a key indicator; a sharp rise could signal a shift in sentiment that might strengthen the JPY, while continued weakness could exacerbate its decline. Look for potential support levels around recent lows in the JPY and be prepared for rapid movements as the election date approaches. If you’re trading JPY pairs, consider setting alerts for key economic announcements or shifts in JGB yields, as these could provide actionable insights into market direction.