Core Viewpoint - The likelihood of a weakening USD/JPY exchange rate is increasing following the Japanese Senate elections, influenced by various factors [1] Group 1: Economic Policies - The Japanese government may adopt more expansionary fiscal policies, with funding expected to come from the tax surplus of the 2024 fiscal year rather than new bond issuance, which should help alleviate downward pressure on the yen [1] - Market expectations for Bank of Japan interest rate hikes have been lowered to a cumulative increase of 16 basis points by the end of 2025, indicating limited further downside for the yen in the context of a dovish central bank stance [1] Group 2: Market Positioning - Nomura has re-established short positions on USD/JPY, targeting a decline to 142.00 by the end of October [1] - The current USD/JPY exchange rate is stable around 147.60 [1]