The yen is hovering around 155.50 per dollar, having given back about half of its earlier gains against the greenback that followed speculation about possible coordinated U.S.–Japan intervention to support the currency.

Polling indicates that Prime Minister Sanae Takaichi’s Liberal Democratic Party is on track for a decisive victory in the weekend election. Such an outcome is weighing on Japanese bonds and the yen, as it would strengthen her mandate for fiscal easing.

Japan’s Finance Minister Satsuki Katayama on Tuesday downplayed Takaichi’s weekend remarks highlighting the benefits of a weaker yen, a stance that contrasts with official efforts to underpin the currency.

Against this mixed backdrop, USD/JPY could trade sideways in the near term, though fresh catalysts tied to U.S. dollar moves may lift volatility.