The Japanese yen rose in Asian trading on Monday against a basket of major and minor currencies, heading toward its first gain in seven days against the US dollar, as it attempts to recover from a three-week low recorded in early trading this week, supported by notable dip-buying activity.

The move is also supported by rising concerns over possible intervention by Japanese monetary authorities to support the local currency, outweighing the impact of the ruling party’s landslide election victory led by Prime Minister Sanae Takaichi.

The ruling Liberal Democratic Party, led by Takaichi, secured a sweeping victory in the House of Representatives election on Sunday, backed by pledges to ease living-cost pressures on Japanese households and accelerate economic stimulus efforts.

Price Overview

The Japanese yen exchange rate today: the dollar fell against the yen by 0.6% to 156.20, from Friday’s close at 157.18, and recorded an intraday high at 157.66, the highest level since January 23.

The yen ended Friday down 0.1% against the dollar, marking its sixth straight daily loss, driven by election-related speculation in Japan.

The yen lost 1.6% against the dollar last week, its first weekly loss in three weeks and the largest weekly decline since July 2025.

Landslide victory

Japanese Prime Minister Sanae Takaichi achieved a historic landslide victory in Sunday’s general election, strengthening her grip on power and granting her a strong mandate to push forward her political and economic agenda.

The Liberal Democratic Party secured 316 seats on its own out of 465 in the House of Representatives, the highest seat count for the party since its founding in 1955.

With this result, the party holds a two-thirds majority on its own, enabling it to pass laws and budgets even if rejected by the upper house, and opening the door to major constitutional amendments.

With its new partner, the Japan Innovation Party, winning 36 seats, the ruling coalition’s total rose to 352 seats.

The centrist reform opposition alliance suffered heavy losses, giving up more than two-thirds of its previous seats.

Early voting reached a record 26%, or about 27 million voters, despite severe cold and snowfall across large parts of the country on election day.

New warnings

Atsuki Mimura, Japan’s top currency diplomat, said authorities are closely monitoring foreign exchange market moves with a high sense of urgency. Exchange rates should move in a stable manner reflecting economic fundamentals, and appropriate action will be taken if needed to counter excessive or speculative moves.

Opinions and analysis

Sim Moh Siong, a currency strategist at OCBC in Singapore, said that although the yen’s initial weakness did not develop as expected, the outlook for the Japanese currency still points to difficulty achieving sustained strength.

He added that, at least in the near term, intervention risks remain a concern, which could limit gains in the dollar/yen pair.

Shoki Omori, chief rates and FX strategist at Mizuho Bank in Tokyo, said the Liberal Democratic Party’s landslide win removes political uncertainty and supports policy execution, but shifts market focus directly toward how fiscal policy will be designed and delivered.

He added that fiscal expansion risks had largely been priced in before the election, and the key question now is whether those risks will intensify or gradually fade.

Japanese interest rates

Money markets price the probability of a quarter-point rate hike by the Bank of Japan at the March meeting at below 10%.

Investors are watching for further data on inflation, unemployment, and wages in Japan to reassess those expectations.

The prospect of AI-driven disruption has hovered over the economy for years, but new software tools unveiled this week triggered a sharp selloff on Wall Street.

Software stocks were hit by heavy selling during the week after investors realized that the threat of AI displacing existing business models has become a present reality rather than a distant risk.

While the possibility of AI disruption has long been discussed, a new wave of tools launched this week by a San Francisco startup forced Wall Street into a sudden confrontation with that reality.

Software companies most exposed to the risks from these new tools were among the hardest hit, along with investment funds that lend to them. The selling pressure also weighed on the broader market, with the S&P 500 turning negative for the year on Thursday after falling in six of the last seven sessions, before rebounding 1.5% the following day.

In recent years, artificial intelligence acted as rocket fuel for equities, pushing prices to record highs. But since October, that enthusiasm has started to fade as markets increasingly digest the practical implications of this transformative technology.

Investors are no longer only worried that AI could render some companies obsolete — they are also questioning the scale of corporate spending on it. Those concerns intensified Thursday after Amazon revealed plans to spend $200 billion this year on AI and other major investments, about $50 billion above analyst expectations, sending its stock down more than 7% on Friday.

Alphabet, Google’s parent company, said this week it may spend up to $185 billion this year, while Meta said last week its capital expenditures — largely driven by AI — could reach $135 billion.

In the software sector, the immediate trigger for this week’s selloff was Anthropic’s announcement on Tuesday of additional free software tools that allow companies to automate functions such as customer support and legal services.

Because these tools are open-source, any company can download and use them at no cost, threatening to replace paid enterprise software currently sold by other vendors.

Another area exposed to AI risk is Software-as-a-Service, or SaaS — the subscription-based model that delivers software over the internet instead of through on-premise installation. New AI-powered free software models could replace not only SaaS business models but also a large portion of the workforce built around them.

Sam Altman, CEO of OpenAI, said in an interview with the tech streaming program TBPN on Thursday: we have seen several major selloffs in SaaS stocks over the past few years as these software models were introduced, and I expect more.

Analysts have dubbed the broad selling wave the “SaaSpocalypse.”

Shares of companies such as LegalZoom, LexisNexis, and Thomson Reuters — which provide legal services and research — fell by as much as 20% over the past week, with uneven rebounds in recent sessions.

Salesforce, a major SaaS and customer-relationship-management software provider, has dropped 25% over the past month.

Even creative software firms were not spared. Shares of Adobe and Figma — both design-tool developers — fell 9% and 17% respectively during the week, amid concerns that many core design functions could be automated in the future.

AI spending pressures are not limited to software. The boom in AI investment has driven massive demand for RAM and related hardware needed to run AI systems.

Qualcomm said on Wednesday it faces uncertainty about chip demand over the next two years, partly because sharply rising memory costs could weaken consumer demand for new devices. Qualcomm shares are down about 20% this year.

Software companies have also been a preferred target for private credit lenders because subscription models provide steady income streams that can support debt loads.

While private credit deals are not publicly disclosed, loans held by business development companies, or BDCs, serve as a proxy. According to Barclays analysts, roughly half of software-sector debt held by these firms — about $45 billion — matures after 2030, raising duration and disruption risks if AI displaces borrowers before repayment.

A VanEck ETF tracking major BDC holdings is down about 5% this year and more than 20% over the past twelve months.

Even after Ares Management and Blue Owl Capital — two of the largest private credit firms — reported results widely praised by Wall Street analysts this week, their shares remained under pressure from AI disruption fears. Ares is down more than 20% this year, while Blue Owl has fallen more than 16%.

On a Thursday analyst call, Blue Owl co-CEO Marc Lipschultz strongly rejected the idea that AI threatens the firm’s lending business, saying there are no red flags — in fact not even yellow flags — mostly green flags.

CFO Alan Kirshenbaum attributed current challenges to headwinds in private credit, AI, and software, as well as investor redemptions.

Analysts were largely reassured by the company’s results. Glenn Schorr of Evercore ISI wrote that if you removed the company’s name from the top of the report and read the details, you would think it was a very strong quarter.

Bitcoin — which is heavily influenced by retail investors and often trades in line with popular equity themes — fell to around $60,000, its lowest level since October 2024, before rebounding toward $70,000.

During a congressional hearing Wednesday, Treasury Secretary Scott Bessent said the government does not have the authority to force banks to buy Bitcoin to support prices.

As investors cut exposure to more speculative bets such as AI stocks and cryptocurrencies, they are rotating into more traditional sectors viewed as more resilient during volatility.

Since the start of the year, energy, consumer staples, and materials stocks have gained more than 10%, while the technology sector has lagged.

Angelo Kourkafas, strategist at Edward Jones Asset Management, said that after years of technology leading the market, the balance of power is shifting as investors rotate toward traditional parts of the economy.

US stock indices rebounded strongly during Friday’s trading after three consecutive losing sessions, supported by renewed demand for technology shares.

Wall Street was also lifted by gains in industrial stocks, with Caterpillar rising 5.47% to $715.41, and in financial stocks, with Goldman Sachs advancing 3.35% to $920.25.

The US stock market had been under pressure due to broad selling in technology shares, especially software companies, amid concerns over rising spending by artificial intelligence firms.

In trading, the Dow Jones Industrial Average jumped 1.9%, or 913 points, to 49,822 by 16:37 GMT. The broader S&P 500 rose 1.5%, or 101 points, to 6,900, while the Nasdaq Composite gained 1.6%, or 367 points, to 22,908.

Bitcoin fell on Thursday to its lowest level since mid-October 2024, as shrinking liquidity and a broad selloff in global technology stocks renewed pressure on high-risk assets.

The world’s largest cryptocurrency was down 12.4% at $63,539.4 by 17:28 ET (22:28 GMT).

Bitcoin has declined in seven of the past eight trading sessions, losing about 50% from its record peak near $126,000 reached in October 2025.

Steve Sosnick, chief strategist at Interactive Brokers, told Investing.com that the crypto market has moved well beyond a normal cycle and is now in a full bear market, noting that declines of 40–50% or more make that difficult to dispute.

Drivers of the rally have turned into headwinds

Bitcoin’s sharp drop in recent days has coincided with a selloff in technology stocks, as investors rotate into other sectors and assets.

Sosnick said several factors that fueled Bitcoin’s strong rally in 2025 are now working in the opposite direction.

He pointed to strong capital inflows into crypto after the launch of spot Bitcoin ETFs in January 2024, a supportive stance toward digital assets from President Donald Trump’s administration, and heavy buying by digital asset treasury companies, all of which supported the surge.

He added that during the rally, crypto benefited from the absence of traditional margin constraints. While stocks and ETFs are subject to rules such as Reg T, many crypto brokers and platforms offered very high leverage, allowing investors to amplify gains.

From normal correction to sharp liquidation wave

After Bitcoin hit a record above $126,000 on October 6, cryptocurrencies entered a steep selloff just four days later.

Analysts later described the move as a flash crash tied to margin-related losses among highly leveraged traders.

Sosnick said that once momentum shifted, the same factors that boosted crypto began to weigh on it. High leverage magnifies gains on the way up but also intensifies losses on the way down. Expected crypto regulation has also stalled in Congress, while some equity-market investors have exited as momentum moved elsewhere. He noted that while ETFs made crypto exposure easy to buy, they also made it easy to sell.

He said what began as a normal correction turned into a heavy liquidation phase, similar to what has happened in other previously high-flying assets such as software stocks and precious metals.

Thin liquidity amplifies losses

Reports showed that market liquidity was notably thin, amplifying price swings and triggering a chain of forced liquidations after Bitcoin broke key technical levels.

The move accelerated as leveraged positions, especially in derivatives markets, were liquidated after Bitcoin fell below $75,000 and stop-loss orders were triggered.

According to crypto analytics firm CoinGlass, roughly $770 million in crypto positions were liquidated over the past 24 hours.

Altcoin prices today

Most alternative cryptocurrencies also declined on Thursday.

Ethereum, the second-largest cryptocurrency, fell 11.5% to $1,878.11, while XRP, the third-largest, dropped 21% to $1.19.