USD/JPY is currently trading around 156.66, with yen buying gaining traction.

■ Recent FX Developments (Updated)

USD/JPY is currently trading around 156.66, with yen buying gaining traction.

The yen selling seen earlier in the session following the election results has largely run its course. At present, yen buying driven by intervention vigilance is becoming dominant.

• Upside momentum above the upper 157s has stalled

• The pair has retreated to the mid-156s

• Position adjustments are underway, reflecting caution toward:

  • Official comments

  • The risk of actual intervention

Rather than one-way yen selling,
the market is increasingly characterized by “selling on rallies.”

■ USD/JPY: Short-Term Bias Shifts Slightly Toward Yen Strength

While the political impact of the ruling coalition securing a two-thirds majority on its own remains significant,
intervention sensitivity near the 158 level is proving stronger than expected.

• Dip buying tends to emerge around the mid-156s

• However, rally attempts back into the 157s are likely to face selling and renewed yen buying

➡️ In the near term, the market is likely to see tense back-and-forth trading between the upper-156s and just below 157.

■ Spillover to Cross-Yen and Dollar Majors

• Cross-yen pairs are also struggling to extend higher, tracking the renewed yen buying

• EUR/USD and GBP/USD remain relatively resilient, but with yen-driven flows dominating, they are unlikely to become the main focus

■ Key Watch Points (Still Crucial)

• Comments from officials, including Finance Minister Katayama

• Any signs of rate checks or explicit intervention signals

• A gradual shift in focus toward U.S. employment data and CPI later this week

■ Summary (Updated)

• Yen buying is currently dominant (USD/JPY 156.66)

• The broader yen-weak trend remains intact, but
  short-term conditions suggest a corrective phase

• With political dynamics and intervention vigilance overlapping,
  the market environment remains ill-suited for one-directional moves