Japan: Yen Strengthens as US Dollar Weakens.

The Japanese yen strengthened toward 157.5 per dollar on Wednesday, reversing a two-day decline as the US dollar came under significant pressure after early election polls suggested a possible Democratic takeover of both chambers of Congress. The prospect has heightened political uncertainty in the US, with a potential Democratic sweep raising concerns over stricter AI regulations and increased corporate oversight that could weigh on the country's economic growth outlook. The yen also gained support from safe-haven demand, alongside government bonds, as technology and artificial intelligence stocks faced renewed selling pressure. Meanwhile, investors are looking ahead to Japan’s wage data due later this week for further clues on the Bank of Japan’s monetary policy outlook. Last week, the BOJ kept its benchmark interest rate unchanged at 1.25% but indicated that underlying inflation had reached its 2% target, potentially paving the way for another rate hike as early as December.