The Japanese general election is closely watched by the foreign exchange market.

The early elections held in Japan on Sunday were closely watched by the foreign exchange market. The ruling coalition led by the Liberal Democratic Party is widely expected to win a majority of seats. Karen Reichgott Fishman of Goldman Sachs warned, "Fiscal risks still seem tilted to the upside." She stated that concerns about spending have put pressure on Japanese government bonds and the yen, unless the Bank of Japan shifts towards faster rate hikes. A weakening yen could once again spark discussions about intervention, as such discussions provided support for the yen last month. Fishman pointed out that a stronger yen would require "smaller fiscal ambitions, weaker inflation outcomes, or an increased global recession risk." The dollar rose 0.6% against the yen.