A downward trend has been seen on the Japanese yen following the resignation of Japanese Prime Minister Yukio Hatoyama on June 2 (Wednesday). Business analysts has been skeptical about this trend because the successor might be in a dilemma with the weaker currency in his lap.

It’s been two weeks that the yen has suffered against the dollar after Hatoyama and his deputy left their posts in their attempt to improve the winnability of Japan’s ruling party in the elections next month. The uncertain political conditions in Japan raised doubts that the yen can recover after Hotayoma became the fourth prime minister to resign in four years.

Although Hatoyama’s possible replacement Finance Minister Naoto Kan has positive vibes with the weaker yen, business analysts are not convinced about his idea. Kan has been vocal about this as earlier this year he mentioned he wanted the yen to become weak a lot more because most businesses preferred a dollar/yen rate around 95 yen, which would boost their income. Subsequently, Kan has mostly supported the finance ministry line that stable currencies are appealing as well as markets ought to fix foreign exchange levels.

Some investors might just see this in a positive light as the yen losses were limited. They can benefit through risk aversion by taking advantage of the European debt crisis. Simon Derrick, head of currency research at BNYM, suggested that: “Almost anything you throw at the yen these days is negative and yet here we are at these levels. That tells you demand for yen is for reasons other than what’s going on in Japan.”