Japanese yen recovers amid policy signals and election focus

The Japanese yen moved back above 155 per dollar on Tuesday after two days of losses, even as the US dollar remained underpinned by strong economic data and a more hawkish Federal Reserve outlook. The dollar index hovered near 97.3 following a sharp rebound earlier in the week. Pressure on the yen has persisted amid domestic political developments, after Prime Minister Sanae Takaichi signaled that a weaker currency could benefit exporters. With a snap lower house election set for February 8 and expectations of expansionary fiscal policies, investors remain cautious. Attention now shifts to Fridays US jobs report, though its release could be delayed by a partial government shutdown.

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