​EBC Markets Briefing | Yen lower after Japan election; Stellantis shares collapsed

The yen extended a string of recent losses in early Asian trading on Monday after Japanese PM Sanae Takaichi swept to victory in the snap election, easing the path to further fiscal stimulus.

Alongside her coalition partner, she will likely secure a supermajority of two-thirds of seats, which enables the current government to swiftly implement aggressive stimulus package.

Foreign reserves could fund spending and tax cuts, though doing so could cause problems as they are used to conduct currency intervention, Finance Minister Satsuki Katayama said in a television programme.

She has also issued escalated yen warnings several times, signalling readiness to intervene as officials stress coordination with the US and vigilance against disorderly forex moves.

Japan's service PMI rose to 53.7 in January 2026, surpassing the flash reading of 53.4. That marked a 10th consecutive month of expansion and the fastest pace since in nearly a year.

However, Takaichi's critics say that she has unnecessarily exposed Japan to Chinese economic coercion and that could threaten access to rare earth minerals and undermine exports.

The yen went into reverse in late January when RSI rose above 70. There seemed to be resistance around 50 SMA, with high odds of a return to 157 per dollar.

Asset recap

As of market close on 6 February, among EBC major products, Lam Research shares led gains after reporting a strong Q2 of fiscal 2026, exceeding revenue, earnings, and guidance expectations.

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Stellantis announced a "reset" of its business after its enormous investments in EV failed to pay off. Europeans' appetite for cleaner cars has been lower than company expected, partly due to looser environmental laws.

Iranian Foreign Minister on Sunday ruled out Tehran ever giving up uranium enrichment in its negotiations with Washington. The tough stance may provoke Trump, which bodes well for the oil market.

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