Core Viewpoint - The Japanese yen strengthened following the results of the Senate elections, but the outlook remains uncertain due to tariffs and political instability [1] Group 1: Election Results and Market Reaction - The ruling coalition in Japan lost its majority in the Senate elections, leading to a rise in the yen to 148.46 against the dollar, although it remains close to a three-and-a-half-month low [1] - The ruling coalition, consisting of the Liberal Democratic Party and Komeito, failed to secure a majority in both the recent Senate elections and the previous House of Representatives elections, resulting in a minority government [1] - Market reactions to the election results were muted, as investors may have anticipated a worse outcome for the ruling coalition [1] Group 2: Political Implications and Trade Negotiations - The election results come at a critical time as Japan seeks to finalize a tariff agreement with the U.S. by the August 1 deadline [1] - Analysts suggest that if Prime Minister Shigeru Ishiba resigns, it could trigger political turmoil, leading to potential sell-offs of Japanese stocks and the yen by foreign investors [1] - There is skepticism regarding the yen's ability to maintain its strength, given the long-term political uncertainty affecting Japanese assets [1]