Since Sanae Takaichi’s first appointment in October 2025, with her party vowing for “aggressive and responsible” fiscal policies, traders had been anxiously awaiting new snap elections. Having now passed the bar on a landslide victory, participants are taking a break from the yen sell-off amid intervention fears.
USD/JPY is known to be a volatile pair and hasn’t failed to live up to its reputation since mid-2024.
Subject to +10% up-and-down movements now and then, the currency cross is right at the intersection of high-priority fiscal and monetary policy divergences between the Land of the Rising Sun and Western economies.
After Sanae Takaichi’s recent appointment at the head of the LDP party in October 2025, traders led a significant repricing for a weaker yen, pushed by stimulative, fiscally dovish policies.
A representative of Shinzo Abe’s active policies that aim to restructure the economy from the fiscal side, Takaichi gained strong popularity through her more conservative stance and a concrete action plan to leverage the stimulatory effects of her policies to address a long-stagnant Japanese economy.
She is also the first woman elected, but hasn’t failed to attract old-fashioned Japanese voters.
Her party just won Sunday’s snap elections with the highest margin in post-war politics1, earning the “supermajority” rank by winning two-thirds of the parliamentary seats and allowing her to implement her policies without resistance.
After high-volatility speculative positioning in the currency pair, participants are moving back towards fear of imminent FX intervention from the Ministry of Finance.
Despite Takaichi's dovish announcements on removing the 8% food tax, concerns might persist around heightened threats of intervention, with three top officials coordinating their defense over the weekend.3
USD/JPY is now backing away from its 158.00 resistance, with traders reassessing the catalysts for action from Japanese politicians.
USD/JPY 4H chart, February 9, 2026. Source: TradingView. Past performance is not indicative of future results.
Resistance levels
- 156.00 Key resistance
- Mini-resistance 157.00 to 157.30
- 157.644 Election highs
- 158.50 to 159.50 2025-2026 Major resistance
Support levels
- 155.00 Major pivot (immediate test)
- 154.00 Pivotal support
- Mid-term support from 152.80 to 153.00
- Key momentum support 151.50 to 152.00 (January lows)
Footnotes:
This article and its contents are intended for educational purposes only and should not be considered trading advice. Forex trading is high risk. Losses may exceed deposits.
