Created
: 2025.07.22
2025.07.22 19:02
Japan's political stalemate is likely to limit large-scale fiscal stimulus, easing pressure on long-term JGB yields. Meanwhile, USD/JPY has stabilized after recent losses and is expected to remain rangebound in the coming months, BBH FX analysts report.
"Long-term JGB yields and the Topix index showed a muted reaction on the first trading day following Sunday's upper house election result. USD/JPY retraced some of yesterday's losses. In our view, Japan's political gridlock means large scale stimulus or deficit spending is unlikely, which could ease upward pressure on JGB yields."
"We see USD/JPY holding a wide 142.00-150.00 range the next few months. The drag to USD/JPY from broad USD weakness is partially cushioned by the Bank of Japan's limited scope for further rate hikes."
Created
: 2025.07.22
Last updated
: 2025.07.22
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