The Japanese yen steadied around 156.8 per dollar on Friday, but was still set to lose more than 1% for the week as investors prepared for this weekend’s lower house elections. The currency came under pressure amid expectations that Prime Minister Sanae Takaichi will win voter backing for increased spending and potential tax cuts, raising concerns over Japan’s fiscal outlook. Uncertainty over how the government would fund its ambitious plans and offset potential revenue losses weighed on markets. Investors are also awaiting Japan’s Q4 GDP report next week, which is expected to rebound after a sharp contraction in the previous quarter. Takaichi recently noted that a weak yen could benefit exporters, later clarifying that her comments aimed to promote an economy resilient to currency swings. The yen had rallied as much as 4.5% in late January amid speculation of a US-Japan joint currency intervention but has since surrendered more than half of those gains.
