Strategist: Yen May Weaken Due to Political Uncertainty

According to a report by Jinse Finance, strategists at Pictet Asset Management stated that the Japanese yen faces depreciation risks against the US dollar. They noted that political and economic uncertainties could put pressure on the yen. Last month's House of Councillors election in Japan has increased the risk of a hung parliament. Concerns over a potential rise in public borrowing are also putting pressure on government bonds. This may prompt the Bank of Japan to withdraw its quantitative tightening policy, which would be unfavorable for the yen. They also mentioned that the US dollar's weakness so far this year has been somewhat excessive and is likely to enter a period of consolidation. (Jin10)