JPY Surges as Japan's Ruling Coalition Loses Parliamentary Majority

USD/JPY has dropped sharply to 147.85 at the weekly open, representing a significant yen appreciation of approximately 1.5% from Friday's close. EUR/JPY similarly declined to 172.10, reflecting broad-based yen strength across major pairs. The catalyst for this movement is Japan's ruling coalition losing its upper house majority in Sunday's election, creating political uncertainty that traditionally benefits the safe-haven yen. Prime Minister Shigeru Ishiba's weakened political position could complicate future policy implementation, including potential Bank of Japan monetary policy normalization. Technical indicators show USD/JPY breaking below the key 149.00 support level, with next support at 147.00. The political instability may delay any hawkish BOJ moves, but paradoxically strengthens the yen through risk-off sentiment. Traders should monitor 150.00 as resistance for any rebound attempts, while further political developments could extend yen gains.