According to FXStreet, on November 4, the Japanese Yen (JPY) increased in value as the US Dollar (USD) weakened, possibly due to concerns about the upcoming US presidential election.
The latest polls show Vice President Kamala Harris with a slight lead in states like Nevada, North Carolina and Wisconsin, while former President Donald Trump has an advantage in Arizona. Races in Michigan, Georgia and Pennsylvania are also very close, with a margin of error of just 3.5 percentage points.
The US presidential election often brings uncertainty to financial markets, including currency markets, as economic policies and direction can change significantly depending on who wins.
During times of uncertainty, investors often seek safe haven assets such as gold, Japanese government bonds or the Japanese yen. This flight to less risky assets reduces demand for the US dollar, thereby weakening its value.
The US Federal Reserve (Fed) could also be affected by the election results. If the results are highly volatile, the Fed may have to maintain a loose monetary policy to help stabilize markets. Lower interest rates make the US dollar less attractive to investors and the value of the dollar could fall.
Thus, the US presidential election not only affects investor confidence but also impacts expectations about fiscal and monetary policies, making the USD more likely to depreciate while waiting for clearer results.
On the Japanese side, the Japanese government expects the Bank of Japan (BoJ) to work closely to achieve its inflation target in a sustainable and stable manner. However, Japan's manufacturing PMI fell to 49.2 in October, indicating that manufacturing remains weak.
The Bank of Japan decided to keep its short-term interest rate at 0.25%, in line with expectations. The BoJ said it would continue to raise rates if the economy and inflation were as expected, with the aim of achieving 2% inflation steadily.
However, the Japanese market is closed for Sports Day, which limits the trading volume of the JPY. The JPY may decline in the future due to political and monetary policy uncertainty. After the ruling coalition won a majority in the Diet, there are mixed opinions on the BoJ's policy direction.
According to Lao Dong, at 1:00 p.m. on November 4, the USD/JPY exchange rate is currently fluctuating between 151.6-152.58 JPY/USD.
See more news about Yen exchange rates HERE.
