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Investing.com -- The Japanese yen could face significant pressure if Sanae Takaichi becomes the next leader of the Liberal Democratic Party (LDP) following Prime Minister Shigeru Ishiba’s potential resignation, according to MUFG Bank analyst Lee Hardman.
In a note, Hardman identified Takaichi as a likely frontrunner to replace Ishiba if he steps down after the LDP lost its majority in Sunday’s Upper House election.
Hardman noted that Takaichi’s strong ideological alignment with former Prime Minister Shinzo Abe and his Abenomics policies, which advocated maintaining loose fiscal and monetary policies, could have currency implications.
A Takaichi leadership would likely spark market speculation that the Bank of Japan might face increased government pressure to delay interest-rate increases, which would weaken the yen, according to the MUFG analysis.
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