The yen strengthened across major currency pairs on Monday after Prime Minister Shigeru Ishiba said he would stay in office despite his ruling Liberal Democratic Party–Komeito coalition losing its majority in Japan’s 248-seat upper house. The currency rose roughly 1% to ¥147.31 per U.S. dollar and added about 0.4% against the euro and sterling, reversing part of last week’s slide that had taken it to a 3½-month low. Japanese cash markets were closed for a public holiday, leaving the foreign-exchange market as the primary barometer of investor sentiment. In the absence of Tokyo cash trading, benchmark 10-year Japanese Government Bond futures initially climbed two ticks to 138.37 before turning flat, while Nikkei 225 futures edged 0.1% lower. Several strategists said the ruling bloc’s setback and questions over future fiscal policy could leave both bonds and equities vulnerable when full trading resumes. The dollar weakened broadly alongside a retreat in U.S. Treasury yields, pushing the dollar index down about 0.5%. Analysts attributed part of the move to renewed uncertainty over U.S. tariff negotiations ahead of an Aug. 1 deadline and to expectations that forthcoming European Central Bank and Federal Reserve meetings will leave policy rates unchanged. Market participants are watching whether Ishiba can push through fiscal measures and advance talks with Washington amid a splintered opposition that is considering a no-confidence motion. ING and other forecasters cautioned that political uncertainty may cap further yen gains, although several expect a stronger Japanese currency by year-end if U.S. dollar momentum fades.