The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, extending its losses for the third consecutive day against the US dollar, ahead of the parliamentary vote to choose a new prime minister in the world’s fourth-largest economy.

Sanae Takaichi, leader of the ruling Liberal Democratic Party, is steadily moving toward victory in the race for Japan’s premiership, which would make her the first woman in the country’s history to lead the government, after securing decisive political backing that strengthens her chances of winning the post.

Price Overview

• The USD/JPY exchange rate rose by about 0.3% to ¥151.15 from an opening level of ¥150.74, after recording a low of ¥150.47.

• The yen ended Monday’s session down 0.1% against the dollar, marking its second consecutive daily loss, as corrective moves and profit-taking continued from its two-week high at ¥149.37.

Political Developments

Kyodo News reported that the ruling Liberal Democratic Party and the Japan Innovation Party announced the formation of a formal coalition, in a strategic move aimed at securing a parliamentary majority ahead of the decisive vote to elect the new prime minister later today.

Sanae Takaichi, who is seeking to become Japan’s first female prime minister, faced a significant political setback earlier this month after the sudden withdrawal of Komeito — the Liberal Democratic Party’s traditional coalition partner for more than 26 years.

The new alliance with the Japan Innovation Party, known for its hardline right-wing positions, appears to give Takaichi strong momentum toward power, as both parties share similar views on economic and defense issues, including support for accommodative monetary policy and higher military spending to strengthen the country’s defense capabilities.

According to reports from Japan’s FNN network, Takaichi plans to appoint former Regional Revitalization Minister Satsuki Katayama as finance minister in her upcoming cabinet.

Opinions and Analysis

• Ray Attrill, Head of FX Strategy at National Australia Bank, said: “If Takaichi is confirmed as prime minister today, the next question will be about the policies she will pursue — particularly regarding monetary policy and fiscal direction — and whether the Ishin Party has set specific conditions for its alliance with the Liberal Democratic Party.”

• Attrill added that these significant political developments in Japan could open the door to notable volatility in yen movements.

Oil prices fell during Monday’s trading session, hitting their lowest levels in five months, as investors assessed the prospects of a global supply glut in addition to trade uncertainty between the United States and China.

According to estimates published by Reuters on Monday, the market is showing a shift from concerns about supply shortages to fears of oversupply, as traders adopted a behavior known as “contango” last Friday — meaning that participants are storing oil to sell it later at higher levels, based on expectations of reduced supply afterward.

Trade tensions between the United States and China remain in place after both sides imposed additional tariffs on reciprocal shipping, in steps that could disrupt global trade flows.

In trading, Brent crude futures for December delivery fell by 0.5%, or the equivalent of 28 cents, to 61.01 dollars per barrel at settlement.

US Nymex crude futures declined slightly by just two cents, closing at 57.52 dollars per barrel.

Gold prices in the United States and worldwide have risen sharply in recent months, driven by a combination of economic, financial, and political factors.

This trend — in which gold has outperformed the US GDP and the four major American stock indexes — began in 2000 and continues to this day.

Below are 13 reasons explaining why gold has outperformed most major investments and why it is likely to continue attracting both retail and institutional investors:

1. A Safe Haven in Times of Uncertainty

Throughout history, people — from merchants to monarchs — have held gold as a hedge against inflation, economic instability, and war. Owning gold has enabled individuals to survive political crises, especially during the collapse of fiat currencies.

2. Geopolitical Tensions

Global instability has recently become a key driver of gold’s rally. Conflicts in the Middle East, the war in Ukraine, and the decline of Hong Kong’s autonomy under the Sino-British agreement have all contributed to higher gold prices.

3. The US Federal Reserve

For over half a century, gold prices have risen partly as a hedge against inflation and weak US monetary policy. According to the Bureau of Labor Statistics, today’s dollar buys only 16.78% of what it could purchase fifty years ago. If the dollar were still backed by gold, it would have retained its full purchasing power.

4. Inflation and the US Dollar

For much of its history, the US dollar was backed by gold and/or silver. In the early 20th century, 100 one-ounce gold coins could buy a mid-priced home. In 1980, gold averaged about 615 dollars per ounce, while the average US home cost around 64,600 dollars.

According to the Federal Reserve Bank of St. Louis, the average home price today is 422,600 dollars, while gold stood near 4,203 dollars per ounce as of October 15, according to Yahoo Finance.

In 1980, buying a new home required about 100 ounces of gold — roughly the same amount as today — showing that gold has preserved and grown wealth, unlike the dollar, which has lost much of its real value.

5. Central Banks

Many central banks and governments buy gold as a hedge against inflation and to mitigate concerns about the US dollar’s value. For instance, the US national debt has risen from less than 6 trillion dollars in 2000 to nearly 38 trillion dollars today.

6. National Debt and Global Imitation

US national debt now exceeds 37.85 trillion dollars — about 124.86% of GDP, compared with 34.68% in 1980. That equals roughly 110,176 dollars per citizen or 326,500 dollars per taxpayer. Excessive government spending isn’t unique to the US; Japan and China face even higher per-capita deficits.

7. Political Instability in the United States

The US federal budget deficit stands at roughly 1.9 trillion dollars annually, with little chance of reduction given the lack of political cooperation. Reversing this trend would require policies that support both economic growth and fiscal discipline.

8. Global Policy Divisions

Disagreements over trade, taxation, food production, and electric vehicle manufacturing have fueled global tensions, contributing to gold’s upward momentum.

9. Economic Philosophy and Growth

In the US and other nations founded on free-market capitalism and the rule of law, increasing regulation and declining entrepreneurial spirit have stifled growth, pushing investors toward gold as a safer store of value.

10. Stock Market and GDP Performance

From 2000 through the end of September 2025, gold has outperformed the four major US stock indexes, as well as silver and US GDP growth, easily outpacing inflation and reaffirming its resilience as a long-term store of value.

11. The Real Goal of the BRICS Alliance

BRICS nations — Brazil, Russia, India, China, and South Africa — along with other countries less aligned with the US, are buying large quantities of gold in an effort to replace the dollar as the world’s reserve currency. If successful, it would make global transactions costlier for American producers and consumers and weaken US foreign policy influence.

12. Technological Advancement and the AI Boom

Gold’s use in technology grew significantly between 2000 and 2010 before dipping slightly. With the rapid rise of artificial intelligence and new energy systems, demand for gold has climbed again thanks to its superior conductivity and corrosion resistance.

13. Limited Supply vs. Rising Demand

Global gold demand hit record highs in 2024 and 2025, while new supply has failed to keep pace. Unless one or more of these underlying factors change, gold prices are likely to continue rising in the years ahead.

Conclusion

On October 9, gold closed at 3,946 dollars per ounce, down about 100 dollars on the day, as markets rallied following a ceasefire announcement between Gaza and Israel.

But the next day, major markets fell more than 800 points after China announced new restrictions on rare earth exports to the US — sending gold back above 4,000 dollars per ounce.

The report concludes that the only sustainable way to lower gold prices is through sound political and economic policies that promote both economic and political freedom — policies that give people everywhere the opportunity to live in a more open, competitive, and prosperous environment, where success stems from hard work and innovation rather than government intervention.

US stock indexes rose sharply on Monday as markets focused on corporate earnings results for the third quarter of 2025.

With the US earnings season underway, several major companies are set to report this week, including Netflix on Tuesday, Tesla on Wednesday, and Intel on Thursday.

Meanwhile, optimism is growing that the ongoing US government shutdown — now in its twentieth day — could end this week.

Kevin Hassett, Director of the National Economic Council, told CNBC in an interview that the shutdown is likely to be resolved within the week.

Hassett added that moderate Democrats are expected to meet this week to reach an agreement, while emphasizing that the White House is prepared to take stricter measures to end the shutdown if no deal is reached.

In trading, the Dow Jones Industrial Average rose 1.1% (498 points) to 46,688 as of 18:20 GMT, while the broader S&P 500 gained 1.2% (77 points) to 6,741. The Nasdaq Composite climbed 1.5% (342 points) to 23,023.