Yen Weakens as PM Takaichi Pressures BoJ Against Rate Hikes; Nikkei Eyes Record Highs

The Japanese Yen continues its decline against the US Dollar, with the USD/JPY pair trading above 156 as political pressure on monetary policy intensifies. Reports emerged that PM Sanae Takaichi directly expressed reservations about further interest rate hikes to BoJ Governor Kazuo Ueda during a private meeting last week. This revelation contrasts with Governor Ueda’s earlier description of the encounter as a routine exchange of views, highlighting a growing rift between the government and the central bank. The direct political challenge to the BoJ's hawkish path is dampening expectations for near-term tightening, further devaluing the Yen. Meanwhile, the Nikkei index is approaching record highs as investors weigh the implications of a prolonged low-rate environment. Market analysts suggest that this policy uncertainty remains a primary headwind for the Yen, potentially pushing it toward the 160 psychological level.