USD/JPY surges as Japan election weakens Ishiba's coalition government

USD/JPY gapped higher at the Asian open, jumping 0.8% to 157.20 as Japan's ruling coalition lost its parliamentary majority in Sunday's election. Prime Minister Ishiba's Liberal Democratic Party and coalition partner Komeito secured only 215 seats, falling short of the 233 needed for control. The political uncertainty has weakened the yen as markets price in potential delays to Bank of Japan policy normalization. Ishiba acknowledged his diminished governing powers while pledging to remain in office to handle critical issues including US trade tariff negotiations with the incoming Trump administration. The pair faces immediate resistance at 158.00, with HSBC analysts warning that 155-160 could trigger BOJ intervention. Support lies at 156.50 (Friday's close). Traders should monitor any signs of verbal intervention from Japanese officials as the pair approaches the psychologically important 160 level.