Tax-relief jitters keep Japan markets on edge, ex-diplomat warns

Japan’s markets remain jittery over potential fiscal loosening, with a former currency diplomat warning that additional tax relief could spark a renewed selloff in government bonds and a weaker yen. Investors are wary of LDP signals ahead of the February 8 snap election, and while the yen has rebounded to about 154 per dollar, analysts say a sustained recovery is unlikely and a brief move into the 140s per dollar remains possible if policy expectations shift.