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The report from OCBC Bank discusses the ongoing weakness of the JPY amid fiscal uncertainty ahead of Japan’s election on February 8. The contrasting behavior of JGB yields suggests differing interpretations among investors regarding Japan’s fiscal outlook. The report highlights potential intervention risks and the implications of the election results on the JPY’s stability. Fiscal uncertainty weighs on JPY “Verbal intervention risks could rise as the 8 February Japan election keeps fiscal uncertainty weighing on the JPY. Intervention concerns should help cap USDJPY upside both before and after the vote.” “Fiscal worries typically weaken the JPY and push long-end JGB yields higher. The contrast between a relatively calm JGB market and a struggling JPY is notable, hinting at diverging views between bond and FX investors on potential LDP fiscal direction after a likely ruling coalition win.” “A majority win would strengthen PM Takaichi’s mandate to pursue ‘Sanaenomics’ (fiscal stimulus), which could pressure the JPY. However, the JPY could stabilise if a clear LDP majority reduces the need for looser fiscal or monetary measures to court opposition support.” (This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.) Source: https://www.fxstreet.com/news/jpy-weakness-persists-ahead-of-election-ocbc-bank-202602050922

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Filed under: News - @ February 5, 2026 10:23 am