The dollar stabilized on Thursday and is on track to record its best weekly performance in nearly a year, benefiting from the weakness of the yen amid changes in Japan’s ruling party.

Markets this week faced political turmoil in Japan and France alongside the ongoing U.S. government shutdown, which increased investors’ demand for safe-haven assets like gold.

The yen took a heavy hit after conservative Sanae Takaichi was chosen as the leader of the Liberal Democratic Party, bringing her close to becoming the country’s first female prime minister. Her selection bolstered bets on a return to heavy spending and ultra-loose monetary policy.

The Japanese currency recorded a slight rise in the latest trading to 152.49 against the dollar, after falling to an eight-month low of 153 against the dollar overnight. It has dropped more than 3% since the start of the week, marking its worst performance since September 2024.

The euro is also under pressure due to the worsening political crisis in France following the shocking resignation of Prime Minister Sébastien Lecornu and his government, although French President Emmanuel Macron is expected to appoint a new prime minister within 48 hours.

The single currency traded up 0.09% at 1.1639 dollars in the latest dealings, ending three consecutive days of losses, although it remains down about 0.9% since the start of the week.

Movements in the yen and euro provided support for the dollar, which rose more than 1% during the week.

The British pound rose 0.07% to 1.3413 dollars after touching its lowest level in nearly two weeks in the previous session, while the Australian dollar gained 0.11% to 0.6594 dollars.

The New Zealand dollar rose 0.1% to 0.5792 dollars after falling in the previous session following a 50 basis point interest rate cut by the Reserve Bank of New Zealand.

Against a basket of currencies, the dollar was little changed at 98.77.