The Japanese yen fell in Asian trading on Monday against a basket of major and minor currencies, extending its losses for the second consecutive day against the US dollar and retreating from its two-week high amid ongoing profit-taking and market correction. The decline also follows key political developments in Japan that bring Sanae Takaichi significantly closer to becoming the country’s next prime minister.

Takaichi, known for her support of fiscal and monetary stimulus, has now become the near-certain frontrunner for Japan’s top political post after reportedly securing crucial political backing.

According to Kyodo News, the ruling Liberal Democratic Party (LDP) led by Takaichi and the Japan Innovation Party will formalize an alliance on Monday, ahead of the parliamentary vote for prime minister scheduled for Tuesday.

Price Overview

• USD/JPY rose 0.4% to 151.20 yen, up from an opening of 150.62 yen, after touching an intraday low of 150.34 yen.

• The yen ended Friday’s session down 0.15% versus the dollar — its first loss in four sessions — as investors took profits after the currency had reached a near two-week high of 149.37 yen earlier in the day.

• For the week, the yen gained about 0.35% against the dollar, marking its second weekly rise in the past three weeks amid ongoing political uncertainty in Japan.

Political Developments

Kyodo reported that the ruling Liberal Democratic Party and the Japan Innovation Party are preparing to formally strengthen their alliance on Monday — a move aimed at securing a parliamentary majority ahead of Tuesday’s vote to select Japan’s next prime minister.

Sanae Takaichi, who is on track to become Japan’s first female prime minister, had faced a major political setback earlier this month when the LDP’s longtime coalition partner, Komeito, abruptly withdrew after a 26-year alliance.

However, the new partnership with the right-leaning Japan Innovation Party could give Takaichi a powerful boost toward leadership, as both parties share common views on economic and defense policy — including support for loose monetary policy and higher defense spending to strengthen Japan’s military capabilities.

Improved Risk Appetite

The yen also weakened as demand for safe-haven currencies eased, with global risk sentiment improving amid signs of easing trade tensions between Beijing and Washington and reduced concerns about US regional banks.

Japanese Interest Rates

• Bank of Japan Governor Kazuo Ueda said last week that the central bank remains prepared to raise its key interest rate if the outlook for growth and inflation continues to improve.

• Following Ueda’s comments, market pricing for a 25-basis-point rate hike at the October meeting rose from 25% to 35%.

• Yen swap markets now indicate a 50% chance of a rate hike by December, up from 41% prior to Ueda’s remarks.

• Investors are awaiting further data on Japan’s inflation, unemployment, and wage growth to reassess these expectations.

Ripple’s price declined on Friday along with most major cryptocurrencies, suffering steep weekly losses as risk appetite weakened and investors moved to liquidate portions of their crypto holdings.

The drop followed comments from US President Donald Trump, who said that the 100% tariffs imposed on China would not be sustainable.

Meanwhile, growing anxiety in the US banking sector has added to the cautious sentiment after two auto companies filed for bankruptcy in recent weeks, raising concerns about lax lending standards — particularly in the opaque private credit market.

Regional banks Zions and Western Alliance reported significant losses tied to poor-quality loans.

JP Morgan CEO Jamie Dimon commented during the bank’s earnings conference this week, saying, “When you see one cockroach, there are usually more,” referring to the collapses of First Brands and Tricolor Holdings.

The downturn comes as the US government shutdown entered its 17th day, with no signs of resolution. Treasury Secretary Bessent stated that the shutdown is costing the US economy about 15 billion dollars per day.

Elsewhere, Federal Reserve Board member Steven Miran said on Friday that two additional rate cuts this year appear realistic amid what he described as a sharp slowdown in inflation.

Miran also noted that while he would prefer a 50-basis-point rate cut at this month’s meeting, he expects the central bank to opt for a smaller 25-basis-point reduction instead.

Ripple seeks to raise $1 billion to repurchase XRP tokens

Bloomberg reported on Friday that Ripple Labs — the issuer of the XRP cryptocurrency — is leading efforts to raise one billion dollars to establish a reserve of its own digital tokens.

Although such moves typically support prices, XRP showed little positive reaction, falling 3.7% to 2.3385 dollars, hovering near its lowest level in 11 months — a level reached during last week’s sharp market crash.

Bloomberg added that the funding will be arranged through a special-purpose acquisition company (SPAC), with Ripple contributing part of its existing XRP reserves to the new fund.

As of 21:07 GMT, XRP was down 1.1% at 2.30 dollars, marking a 14.4% weekly loss.

US natural gas prices fell this week to a two-week low amid forecasts for milder weather in the coming period.

Gas traded at 3.03 dollars per million British thermal units, the lowest since late September, though still far above levels seen in October 2024. Analysts believe that the sharp increase in liquefied natural gas (LNG) exports has played a key role in sustaining these higher prices — a paradox that now places President Donald Trump in a political and economic bind.

Upon taking office, Trump pledged to make domestic energy cheaper while turning the United States into a dominant global energy power. In oil, that meant keeping gasoline prices low while expanding exports. The same ambition applies to natural gas — but achieving both affordability and dominance simultaneously is far more difficult, as the two goals are inherently at odds.

Since the start of the year, US LNG exports have been climbing to record highs.

According to the latest data for September, exports reached 9.4 million tons, up from 9.3 million in August — a new all-time record. That record is expected to be broken again this month as Europe races to stockpile gas ahead of winter.

But the key question now is whether US gas producers can keep up with this surging demand — and more importantly, whether they even want to.

US natural gas producers, like oil drillers, are highly sensitive to price swings. When prices remain low for too long, producers typically scale back output.

That is not the case today. Prices have risen by about one dollar per million British thermal units over the past year, and demand prospects remain strong — driven by the rapid growth of domestic data centers and digital infrastructure that consume massive amounts of energy, as well as Europe’s commitment to increase purchases of US energy.

This means the Trump administration has succeeded in achieving “energy dominance,” but at the cost of its promise to keep domestic prices low.

America’s rise as a “gas superpower” stems from the shale gas revolution. However, shale fields are now maturing, as noted in a *Wall Street Journal* report analyzing Trump’s energy policy.

Over time, extraction costs are expected to rise — pushing prices higher for both US consumers and global buyers.

Eugene Kim, an analyst at Wood Mackenzie, told the paper, “If you want to export all this LNG while meeting growth in the data sector and higher electricity demand, you’ll need higher prices. That’s exactly the opposite of what Trump wants — cheaper energy.”

Norway’s experience two years ago serves as a warning: expanding gas and electricity exports to Europe drove domestic prices sharply higher, sparking public backlash and forcing the government to impose export limits to protect local consumers.

At the same time, Tom Summers, head of LNG trading at Shell, said earlier this year, “Updated projections show that the world will need more gas for power generation, heating, cooling, industry, and transport to meet development and decarbonization goals.” He expects LNG demand to rise by 60% by 2040.

According to the US Energy Information Administration, LNG exports reached 14 billion cubic feet per day in July and could climb to 27 billion cubic feet per day, according to analysts cited by *The Wall Street Journal.*

This scenario looks ideal for US gas producers under an administration eager to expand export capacity — but far less so for domestic consumers.

Rising US gas prices appear inevitable as shale gas productivity declines — a trend also seen in oil fields.

Much of America’s gas output comes as associated gas from oil wells, which are themselves nearing depletion in their richest zones — known as “sweet spots,” or areas with high output and low cost.

This means production costs will rise in the future, translating into higher end prices for consumers.

Industry executives quoted by *The Wall Street Journal* said US producers need prices of at least 5 dollars per million British thermal units to justify investment in lower-yield, higher-cost regions — roughly double current levels.

If that does not happen, supply will eventually contract as drilling slows, which in turn will push prices higher — an outcome producers dislike because it dampens demand.

The CEO of Aeton Energy Management said earlier this year, “We want long-term price stability for the commodity; we don’t want to destroy demand through volatility.”

Yet lasting price stability remains elusive — and with oil and gas demand largely inelastic, the world must brace for an era of more expensive gas.

Copper fell to a one-week low on Friday, heading for a second consecutive weekly loss, as global financial stocks declined amid signs of credit stress in US regional banks, sparking concerns across markets.

Three-month benchmark copper futures on the London Metal Exchange dropped 1.7% to 10,466 dollars per metric ton at 09:15 GMT, after falling as much as 2% earlier in the session to 10,430 dollars — the lowest since October 10. The metal had reached a 16-month high of 11,000 dollars on October 9.

Thu Lan Nguyen, Head of Currency and Commodity Research at Commerzbank, said, “Markets are operating in a risk-off environment, with higher-risk assets facing clear selling pressure.”

She added that copper’s losses were partly limited by the weaker US dollar, which makes dollar-priced commodities cheaper for investors holding other currencies. Still, the metal — widely viewed as a barometer of global economic health — was on track to end the week down about 0.5%.

Pessimism deepened in the base metals market after shares of US regional banks plunged due to rising credit risk concerns and deteriorating loan quality, dampening investor appetite for growth-linked assets. “This is another worrying sign about the state of the US economy,” Nguyen said.

Investors are also monitoring escalating tensions between the United States and China, the world’s largest consumer of copper, after Beijing accused Washington on Thursday of spreading panic over China’s export restrictions on rare earth metals.

Data from the Shanghai Futures Exchange showed copper inventories rose by 550 tons last week to 110,240 tons — the highest since April 25.

Most other base metals on the London Metal Exchange also declined on Friday: aluminum fell 1.4% to 2,748.50 dollars per ton, zinc dropped 1.6% to 2,926.50 dollars, nickel slipped 1.16% to 15,100 dollars, and tin plunged 3% to 34,650 dollars.

Lead was the only gainer, rising 0.3% to 1,970 dollars per ton.