The Japanese yen hovered around 156.7 per dollar in electronic trading on Friday as investors positioned ahead of this weekend's lower house elections. Despite the stability, the currency is set for a weekly loss of more than 1%, weighed down by expectations that Prime Minister Sanae Takaichi will secure voter support for higher government spending and possible tax cuts, intensifying concerns over Japan's fiscal outlook. Uncertainty surrounding how the government plans to fund its policy agenda has kept investors cautious, while attention also turns to Japan's Q4 GDP data due next week, which is expected to show a rebound from the previous quarter's contraction. Adding to the pressure, the US dollar remained firm near a two-week high, as markets reassessed the outlook for US monetary policy. The greenback has gained momentum since President Donald Trump nominated Kevin Warsh as the next Federal Reserve Chair. Warsh is widely viewed as favoring a tighter policy stance, including maintaining higher interest rates for longer and reducing the Fed's balance sheet.

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