According to media reports, conservative politician Sanae Takaichi has been elected Japan’s first female Prime Minister. As we noted on 7 October, she is a supporter of former Prime Minister Shinzo Abe’s Abenomics strategy, aimed at stimulating the economy through aggressive fiscal spending and ultra-loose monetary policy — a factor that fuelled the sharp A→B rally to an eight-month high.

Meanwhile, the most likely candidate for the position of Finance Minister is Satsuki Katayama, a former Minister for Regional Revitalisation, who has previously expressed support for a stronger yen.

Fluctuations on the USD/JPY chart reflect the uncertainty traders currently face as they attempt to gauge the future direction of the Bank of Japan’s monetary policy.

Technical Analysis of the USD/JPY Chart

The yen’s sharp weakening, which began on 6 October, led to:
→ the formation of a bullish gap around the 147.5–149 area;
→ an expansion of the previously established R1–S channel to R2–S.

After reversing from the R2 resistance level, the pair fell back towards the R1 line, which now acts as the channel’s median — a zone where supply and demand tend to balance. This supports the view that USD/JPY could stabilise in the near term.

From a bullish perspective:
→ The key 149–150 area (highlighted in purple) has shifted from resistance to support (as shown by the blue arrows).

From a bearish perspective:
→ Price action between 15 and 21 October indicates that sellers remain in control near the 151.7 level.

In this context, reduced volatility and consolidation of USD/JPY around the ¥151 per dollar level appear to be the most likely scenario — though this could change abruptly in response to major political announcements regarding the new cabinet or the Bank of Japan’s policy stance.

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