The Japanese yen’s under pressure again, and it’s not really about who won Japan’s latest election—it’s all about what people expect the government to do next. Here’s what’s going on.

1) Markets Expect More Fiscal Stimulus (Bad News for the Yen)

Prime Minister Sanae Takaichi just scored a huge win, which basically gives her the green light to roll out growth-focused policies like tax cuts and more government spending.

Why should currency traders care? Simple—more spending means the government borrows more, and Japan’s already drowning in debt. Investors start worrying about whether the country can keep this up, and that doubt makes the yen look shaky. So when markets see big spending plans with no clear way to pay for them, the yen usually takes a hit.

Bottom line: Stimulus tends to lift stocks, but it often drags the currency down.

2) Higher Yields and a Weaker Yen

Right after the election, Japanese stocks shot up. Bond prices dropped, so yields climbed, and the yen lost ground against other major currencies.

What’s going on here? It’s a classic move. Investors dump safe-haven currencies like the yen and pile into riskier stuff like stocks when they see a chance for growth. Money flows out of the yen as people chase returns elsewhere.

3) Bank of Japan Has Its Hands Tied

The Bank of Japan can’t really jump in and save the yen with higher interest rates. Wages in Japan are still pretty flat, inflation isn’t steady, and raising rates too fast could mess with the economy.

So, the BOJ’s likely to keep things loose, especially compared to the U.S., where rates are higher. That gap just makes the yen even less attractive. In FX markets, people don’t want to hold currencies that are stuck with low rates."#EthioCoinGiram