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Japanese Yen Recovery Requires Reduced Fiscal Concerns -- Market Talk

Dow Jones
Feb 06

1446 GMT - Reduced concerns about Japan's fiscal expansion are among the catalysts needed for a meaningful yen recovery, Morgan Stanley says in a note. Polls suggest the ruling Liberal Democratic Party will secure a majority in Sunday's snap election. Prime Minister Sanae Takaichi has recently toned down her rhetoric on cutting the consumption tax. If she places more emphasis on fiscal discipline, that could mitigate concerns somewhat, Morgan Stanley says. Other potential catalysts for a stronger yen include the dollar falling as a result of a weaker U.S. economy or fresh U.S. tariffs that increase geopolitical risks, Morgan Stanley says. The dollar could fall to 145 yen from 156.89 currently if "multiple yen-supportive catalysts materialize simultaneously." (renae.dyer@wsj.com)

(END) Dow Jones Newswires

February 06, 2026 09:46 ET (14:46 GMT)

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