Original article by Skerdian Meta | Source: FX Leaders
Title: USD/JPY Surpasses 150.37 as Takaichi’s Political Momentum Spurs Yen Weakness
The Japanese yen (JPY) has experienced significant depreciation against the US dollar (USD), with the USD/JPY pair climbing above the key psychological and technical level of 150.37. This recent spike follows renewed political developments in Japan, notably Sanae Takaichi’s increasing influence in Japanese politics, which has added further pressure on the yen. The USD’s consistent strength, combined with Japan’s dovish monetary stance and domestic uncertainties, continues to weigh heavily on the JPY.
This article explores why the Japanese yen has weakened further and what factors, including Takaichi’s rising political momentum and broader macroeconomic trends, are pushing the USD/JPY toward higher levels. Traders and investors alike are monitoring the situation closely, given the potential for intervention or monetary shifts from Japanese policymakers.
Overview:
– The USD/JPY broke above 150.37 on October 6, 2025
– This level had previously acted as a resistance zone
– Takaichi’s political advancement signals continued expansionary policies, which are perceived as negative for the yen
– The persistent strength of the US dollar, supported by Federal Reserve policy and US economic performance, exerts upward pressure on USD/JPY
– Markets are now speculating about the possibility of intervention by Japanese authorities to contain the yen’s weakness
Market Reaction: USD/JPY Breaches 150.37
On October 6, the USD/JPY surged through the long-watched 150.37 level, hitting a new multi-month high. This move has captured the attention of forex traders due to its technical and psychological implications. Historically, the 150 mark has acted as a red line for currency authorities in Japan. The pair’s continued ascent past this zone raises the likelihood of an official response, either verbally or through intervention on foreign exchange markets.
Key technical reasons for the breakout:
– Technical resistance at 150.37 was breached with strong bullish momentum
– No significant headwinds until the 151.50–152.00 zone
– RSI and momentum indicators confirm strong buying pressure
– Trading volumes surged during the break, indicating institutional participation
Takaichi’s Political Influence Adds to Yen Bearishness
A key driver of the yen’s recent weakness is the increasing popularity of Sanae Takaichi, a conservative politician seen as a potential Prime Minister in future leadership contests within Japan’s Liberal Democratic Party (LDP). Takaichi is a known advocate of large-scale fiscal spending and continued government support of the Bank of Japan’s highly accommodative stance. Her policy positions suggest few changes in Japan’s ultra-loose monetary environment.
Market interpretation of Takaichi’s policy stance:
– Investors expect prolonged near-zero or negative interest rates from the Bank of Japan
– Fiscal stimulus efforts are likely to expand under her leadership
– The yen, which typically strengthens on tightening or hawkish policy signals, reacts negatively to the likelihood of ongoing expansionary policies
US Dollar Strength Continues Dominating
Meanwhile, the US dollar has remained broadly strong across the board, benefiting from a hawkish Federal Reserve and robust economic indicators. Sticky inflation, tight labor markets, and positive GDP growth figures suggest that the Fed may maintain higher-for-longer interest rates, which support the greenback.
Factors supporting USD strength:
– The Federal Reserve signaling potential for prolonged restrictive policy
– US 10-year Treasury yields climbing closer to 5%
– Continued strong US labor market data, reinforcing economic resilience
– Global investors rotate capital into dollar-denominated assets for yield and safety
Under these macro and policy conditions, the USD/JPY pair remains biased to the upside, especially as the Bank of Japan maintains its yield curve control and low interest rate policies.
Speculation of Intervention Surfaces Again
With the yen trading above 150, rumors and discussions about possible intervention from
Explore this further here: USD/JPY trading.